UNIVERSITY  OF  CALIFORNIA 
AT  LOS  ANGELES 


(MTORSITY  of  CALITORNIi^ 

LOS  ANGELES 
LlBR/vRy 


■x^' 


n^ 


^^^ 


POVERTY   AND   WASTE 


POVERTY    AND 
WASTE 


BV 

HARTLEY  WITHERS 

author  of 
'thb  meaning  of  money,"  "stocks  and  shares,"  "money  changing,"  etc. 


"  The  greatest  of  all  possible  social  reforms  would  be  to  raise  the 
standard  of  wages  throughout  the  country." — Mr.  Bonar  Law 


NEW  YORK 

E.   P.   BUTTON  AND   COMPANY 

1920 


1414  iO 


PREFACE 

It  Is  hard  to  believe  that  many,  who  see  all  the 
evils  of  poverty,  would  live  wastefully  if  they 
understood  how  close  is  the  connexion  between 
poverty  and  waste.  This  Is  my  excuse  for  trying 
to  make  this  connexion  clear. 

HARTLEY  WITHERS 

A/>ril,  1914 


PAGB 


CONTENTS 

CHAPTER   I 

INTRODUCTORY 

The  disappointments  of  civilization — Competition  in  comforts 
— The  lot  of  the  workers — A  new  ideal — The  two  points 
of  view — A  matter  of  business 


CHAPTER  II 

THE   WEALTH   HEAP 

Man's  production  of  goods  and  services — Their  amount 
limited — Demand  for  luxuries  checks  production  of 
necessaries — If  luxury  were  miraculously  abolished — • 
Increased  production  of  necessaries  and  accumulation  of 
capital,  and,  consequently,  demand  for  labour — Objec- 
tions and  difficulties -15 

CHAPTER   III 

THE   CLAIMS   OF   CAPITAL 

Capital  has  to  be  saved — A  store  of  goods  held  back  from 
consumption  to  be  devoted  to  production — Capital 
essential  to  industry  and  so  has  to  be  paid  for — The 
hereditary  wealth-owner — Hereditary  earning-power— 
The  rate  of  interest  for  money  lent — The  additional 
rate  for  money  risked — How  risk  might  be  lessened — 
The  scarcity  and  deamess  of  capital        .        .        .       .      41 


viii  CONTENTS 

CHAPTER   IV 

THE   employer's   DILEMMA 


TACE 


The  capitalist  employer — The  joint >stock  company  manager 
— Conflicting  claims  of  workers,  shareholders,  and  con- 
sumers— The  importance  of  management — An  increase 
in  wages  good  for  all  parties— If  industry  could  be  con- 
centrated on  the  production  of  necessaries      ...      69 


CHAPTER  V 

THE   WORKERS 

Absurdity  of  low  wages  in  the  midst  of  abounding  wealth- 
Bad  economic  results — Attractions  of  Socialism  and  its 
practical  impossibility  at  present — Unity  essential  to 
the  workers'  victory — The  evils  of  violence  and  intimi- 
dation— Middle-class  resentment — The  waste  of  intelli- 
gence due  to  lack  of  education 86 

CHAPTER  VI 

MIDDLEMEN   AND   HANGERS-ON 

Necessary  intermediaries — The  prosperity  of  the  dealer  and 
merchant — Their  risks — Might  be  reduced  if  extrava- 
gance and  luxury  were  diminished — The  waste  and 
absurdity  of  advertising — The  horde  of  providers  of 
necessary  services,  who  are  not  directly  productive — 
Water  in  the  community's  capital    .        .        .        .        •    115 

CHAPTER  VII 

COMMON   SENSE   AND   THE    CONSUMER 

Why  should  not  we  spend  our  money  as  we  please  ? — Dangers 
of  the  position — Our  debt  to  the  community — The 
appeal  to  natural  laws — The  unemployables    .        .        .134 


CONTENTS  ix 

CHAPTER  VIII 

THE  CONSUMERS'    RESPONSIBILITY 


PAGB 


Convention  in  spending — National  expenditure —What  is 
luxury  ? — The  cost  of  motoring — Luxury  and  industry — 
Speculation  and  finance — Responsibility  in  spending — 
Thriftlessness  of  the  Workers — Women's  influence — 
Conclusion 149 

Index 179 


POVERTY  AND  WASTE 


CHAPTER  I 

INTRODUCTORY 

Discontent  with  the  achievements  of  civili- 
zation is  a  common  and  most  hopeful  symptom 
in  the  minds  of  most  of  us  to-day.  Mankind 
has  won  marvellous  victories  over  nature  and 
yet  remains  with  an  uneasy  feeling  that  it  is 
not  a  whit  better  off.  We  have  linked  together 
the  uttermost  ends  of  the  earth  with  steamship 
lines  and  railways  and  telegraph  wires,  the 
wilderness  has  been  made  to  blossom  like  the 
rose,  we  can  fly,  we  can  flash  messages  through 
the  air,  we  can  photograph  invisible  stars,  we 
can  talk  to  our  friends  in  Switzerland,  we  can 
have  concerts  and  preachers  laid  on  to  our 
houses  hke  a  water  supply  ;  and  yet  the  struggle 


2  POVERTY  AND  WASTE 

for  existence  was  never  fiercer,  and  all  the  feats 
of  engineers  and  men  of  science  have  not  made 
our  lives  any  easier  or  happier  or  pleasanter 
or  more  beautiful.  We  have  a  more  varied 
mental  diet,  but  our  appetite  is  not  what  it  was, 
and  our  digestion  is  seriously  impaired. 

This  feeling  of  disillusionment  and  dis- 
couragement is  most  marked  and  most  cheering 
when  the  flashlight  of  thought  is  turned  on  to 
the  business  relations  of  one  man  with  another. 
Here  we  ought  to  see  more  improvement  than 
anywhere,  and  we  see  less.  The  triumphs  that 
have  been  won  have  been  almost  entirely 
material.  We  have  been  so  busy  building 
railways  and  factories  and  improving  machinery 
and  covering  the  world  with  bank  branches, 
that  art  and  philosophy  have  had  to  sulk  in 
the  background  and  beauty  has  given  way  before 
usefulness.  This  we  could  not  help,  because 
we  cannot  do  everything  at  once ;  and  nobody 
would  have  complained  if  all  this  usefulness 
had  really  been  useful,  if  these  material  achieve- 
ments had  achieved  anything  towards  making 
us  more  contented  and  happy.  Art  and  philo- 
sophy can  well  afford  to  wait  until  "  the  whirligig 


INTRODUCTORY  3 

of  time  brings  in  his  revenges.'*  But  thoughtful 
mankind  is  surprised  and  sore  when  it  finds 
itself,  at  the  end  of  a  hundred  years  and  more 
of  glorious  and  successful  enterprise  in  the 
fields  of  industry,  still  working  harder  than 
ever  for  its  living  and  more  than  ever  beset  with 
unsatisfied  wants. 

Two  causes  stand  out  to  account  for  this 
feeling  of  disillusionment  and  failure.  One  is 
the  old  natural  craving  which  makes  almost 
every  one,  how  much  soever  he  has  got,  ever 
want  more,  and  the  other  is  a  new  and  most 
exhilarating  but  very  unsettHng  symptom.  This 
is  the  dawn  of  a  belief  that  no  industrial  victory 
can  be  complete,  no  material  achievement  can 
have  reached  its  goal,  as  long  as  those  who  do 
the  hardest  work  get  so  mean  a  share  of  the 
good  things  of  the  world,  that  they  have  no 
chance  of  Hfe,  in  the  fullest  sense  of  the  word. 

Of  these  two  causes  the  first  is  merely  a 
bad  mental  habit.  We  are  discontented  because 
we  are  dissatisfied,  and  we  are  dissatisfied  because 
we  compare  our  progress  with  that  of  our 
neighbours  instead  of  with  that  of  our  forbears. 
Measured  by  the  standards  of  former  centuries. 


4  POVERTY  AND  WASTE 

the  comfort  that  we  now  enjoy  is  astonishingly 
bountiful.  If  we  are  not  therefore  the  happier, 
that  is  partly  because  the  way  to  happiness 
does  not  lie  through  comfort,  partly  because 
with  our  greater  control  of  the  world's  goods 
many  other  things  have  been  added  unto  us, 
such  as  hurry  and  noise  and  a  crowd  of  confused 
impressions  that  wear  our  minds  like  the  pave- 
ment of  a  busy  street.  But,  chiefly,  it  is 
because  it  is  part  of  man's  nature  never  to  be 
satisfied  as  long  as  he  sees  other  people  better 
off  than  himself.  If  all  our  incomes  could 
by  some  miracle  be  doubled  to-morrow,  without 
any  loss  in  buying  power,  we  should  not  feel 
really  any  better  off,  except,  perhaps,  during 
the  first  few  days,  because  compared  with  our 
neighbours  we  should  be  just  where  we  were 
before.  This  relative  view  of  happiness,  this 
craving  to  lift  one's  self  a  little  above  one's 
neighbours,  is  at  once  the  cause  of  much  of 
man's  chronic  discontent,  and  the  spur  that 
goads  him  into  progress.  It  is  not  necessarily 
a  sordid  motive.  It  seems  so  to-day,  because 
to-day  the  badge  of  success  is  expressed  in 
wealth,  and  a  man  is  said  to  have  distanced 


INTRODUCTORY  5 

those  who  started  with  him  if  he  has  made 
more  money  than  they.  But  apart  from  all 
question  of  money,  a  healthy  combative  instinct 
in  the  normal  man  makes  him  always  want 
to  be  ahead  of  his  fellows  in  something  or,  if 
possible,  in  everything.  Being  merely  a  mental 
habit,  this  form  of  discontent  can  be  cured  or 
greatly  lessened  if  the  mind  can  be  trained  to 
see  its  absurdity  when  it  is  carried  too  far,  or 
has  bad  effects.  Then,  instead  of  always  holding 
out  our  plates  to  Providence  for  a  bigger  helping 
than  our  neighbour,  we  should  learn  to  thank 
Heaven  for  all  the  gifts  that  it  has  showered 
upon  us,  without  measuring  them  against  those 
that  are  enjoyed  by  somebody  in  the  next 
street. 

The  second  cause  of  our  present  discontents 
is  a  new  light  whose  widening  ray  is  going  to 
make  this  century  one  of  the  most  interesting 
in  history.  The  belief  that  the  poverty  of 
the  workers  is  a  thing  that  can  and  must  be 
abolished  may  be  a  will-o'-the-wisp  that  will 
lead  us  into  a  morass  of  economic  failure ; 
but  even  if  it  be  so,  the  failure  will  be  a  glorious 
effort  for  one  of  the  most  inspiring  causes  that 


6  POVERTY  AND  WASTE 

have  ever  fired  mankind  to  folly.  Hitherto 
it  has  always  been  assumed,  except  by  a  few 
voices  crying  in  the  wilderness,  that  by  the 
force  of  inexorable  economic  laws,  every  nation 
must  have  its  human  dregs,  living  in  a  state 
of  half-clad,  half-fed  misery,  and  making  a 
mockery  of  the  civilization  which  allows  their 
existence,  and  that  even  the  best  paid  of  the 
working  classes  must  go  short  of  many  of  the 
goods  and  services  that  make  the  world  a  pleasant 
place  for  those  who  enjoy  them.  Among  the 
many  doctrines  which  have  been  questioned  and 
set  at  nought  by  the  inquiring  spirit  of  the 
present  age,  this  ancient  dogma  of  the  inevita- 
bihty  of  destitution  is  perhaps  the  toughest 
nut  that  it  is  trying  to  crack. 

So  far  the  results  of  the  presence  in  our 
midst  of  this  new  and  noble  ideal  are  ugly  and 
disappointing  on  the  surface.  They  could  hardly 
be  otherwise.  An  ideal  must  have  its  growing 
pains,  and  when  mankind's  notions  are  suddenly 
given  a  violent  twist,  mental  dyspepsia  is  almost 
certain  to  ensue.  Hence  it  is  not  very  surprising 
to  find  cautious  and  conservative  folk  shaking 
their   heads   over   the   melancholy    output   of 


INTRODUCTORY  7 

froth  and  bad  temper  and  windy  theorising  that 
is  going  on  among  us.  The  speeches,  news- 
papers, and  cartoons  that  voice  and  depict 
the  feehngs  of  the  working  classes  would  lead 
one  to  believe  that  the  labourer  lives  in  a 
chronic  state  of  down-trodden  sweated  slavery, 
that  the  capitalist  is  a  heartless  hound  whose 
one  desire  in  life  is  to  grind  the  faces  of  the 
workers  and  swell  his  bank  balance,  and  that 
the  line  between  the  classes  and  the  masses  was 
never  so  strictly  drawn  as  it  is  to-day.  On  the 
other  side,  it  is  only  too  common  to  find  the 
perfectly  reasonable  efforts  of  the  workers  to 
get  a  bigger  share  of  the  good  things  that  they 
help  to  make,  described  as  attempts  at  robbery 
of  the  capitalist  and  the  owner  of  property. 
Hovering  on  the  outskirts  of  the  controversy 
are  a  crowd  of  well-meaning  theorists,  who  insist 
on  telling  the  rest  of  the  world  how  much  better 
everything  would  be  arranged  if  only  certain 
assumptions  were  granted  which  involve  a 
revolution  in  human  nature  and  the  creation 
of  a  new  heaven  and  a  new  earth. 

Ugly  and  disappointing  as  this  spectacle  is, 
there  is  no  need  to  take  it  too  seriouslv.     We 


8  POVERTY  AND  WASTE 

are  quite  used  to  seeing  politicians  in  opposite 
camps,  describing  one  another  as  traitors  who 
are  planning  the  ruin  of  the  country  in  order  to 
further  their  mean  ambitions,  and  then  going 
off  arm-in-arm  to  dine  together  or  play  a  round 
of  golf.  Allowance  must  always  be  made  for 
rhetorical  licence,  for  it  is  difficult  for  enthusiasts 
to  learn  the  great  lesson,  that  the  most  effective 
way  to  state  a  case  is  to  understate  it. 

It  is  fairly  safe,  therefore,  to  assume  that 
the  mass  of  the  workmen  do  not  cherish  the 
delusions  about  capitalists  that  are  too  often 
expressed  by  their  spokesmen.  They  know  as 
well  as  anybody  that  the  employers  and 
capitahsts  are  quite  ordinary  human  beings, 
who  are  engaged  in  working  their  businesses 
or  investing  their  money  to  the  best  possible 
advantage,  just  as  the  workmen  are  trying 
to  get  as  good  a  price  as  they  can  for  their 
labour.  Often  enough  the  workmen  find  it 
hard  to  see  that  there  is  any  sense  or  fairness 
in  a  system  under  which  a  man,  who  has  a 
nice  elean  job  needing  no  bodily  effort  at  all 
and  no  mental  effort  that  is  beyond  any  one 
of  quite  ordinary  inteUigence  and  education, 


INTRODUCTORY  9 

may  receive  a  salary  that  mounts  up  to  thousands 
of  pounds  per  annum,  while  those  who  do  hard 
and  dirty  work  for  much  longer  hours,  are 
paid  a  weekly  wage  which  is  thought  handsome 
if  it  amounts  to  a  hundred  pounds  in  a  year. 
They  often  think  that  this  is  all  wrong  and 
ought  somehow  to  be  put  right,  and  they  are 
groping  after  some  means  of  doing  so.  They 
are  Ukely  enough  to  make  plenty  of  mistakes 
by  the  way,  but  they  do  not  often  make  the 
mistake  of  believing  their  employers  to  be 
monsters  of  greed  and  wickedness. 

From  the  point  of  view  of  the  capitaHst 
the  claims  of  labour  to  better  wages  are  readily 
enough  admitted,  in  the  abstract  and  as  a  matter 
of  theory.  Any  rich  business  man,  if  you  find 
him  in  a  candid  and  reasonable  frame  of  mind, 
will  admit  that  the  hours  that  are  worked  and 
the  pay  that  is  earned  by  most  of  the  hand- 
workers  of  the  country,  do  not  give  them  a 
fair  chance  of  a  fair  life  as  human  beings,  and 
that  it  is  wrong  that  this  should  be  so.  If  it 
could  be  put  right  without  upsetting  the  whole 
economic  machinery  of  the  world,  he  would 
be  delighted  to  see  it  done  to-morrow ;  but  he 


10  POVERTY  AND  WASTE 

cannot  see  how  it  is  possible,  and  he  generally 
points  out,  quite  truly,  that  if  the  Government 
or  anybody  else  is  going  to  try  fanciful  experi- 
ments and  upset  the  said  economic  machinery  of 
the  world,  the  worst  of  the  inevitable  suffering  will 
fall  on  the  poorer  classes.  It  is  not  his  business 
to  put  the  matter  right,  and  he  is  often  rather 
inclined  to  resent  this  uncomfortable  skeleton's 
being  brought  out  of  its  cupboard.  Generally 
he  gives  evidence  of  having  given  much  more 
thought  to  the  matter  than  might  have  been 
expected  of  him.  Sometimes  he  quotes  Holy 
Writ  to  show  that  poverty  must  always  be  with 
us;  and  one  suspects  that  he  quiets  his  con- 
science by  drawing  big  cheques  for  charities ; 
but  quite  a  sensitive  conscience  on  the  point  is 
almost  always  to  be  found  if  one  takes  the 
trouble,  and  the  right  moment,  to  dig  for  it. 

Nevertheless,  if  all  this  be  granted,  the  fact 
remains  that  there  is  much  too  much  bad 
temper  in  the  mental  attitude  of  most  people 
when  they  approach  this  question  of  poverty 
and  the  distribution  of  wealth  ;  and  bad  temper 
will  not  help  anybody  to  solve  it,  whatever 
the  solution  may  be.     This  controversy  differs 


INTRODUCTORY  ii 

from  most  of  the  controversies  that  have 
happened  before,  in  that  it  is  a  matter  of 
business,  and  so,  if  it  is  to  do  anybody  any  real 
and  lasting  good,  must  be  approached  with  all 
the  sweet  sanity  and  serenity  of  temper  in  which 
alone  good  business  can  be  done.  If  your 
controversy  is  poUtical  or  rehgious,  it  may  be 
better  for  you  to  be  able  to  work  yourself 
into  a  state  of  boiHng  fury  and  convince  yourself 
that  all  who  are  against  you  are  traitors  to 
their  country  or  servants  of  the  devil,  as  the 
case  may  be.  In  such  a  frame  of  mind  you  may 
be  able  to  wield  your  broadsword  in  the  battle 
of  Marston  Moor  or  Ivry  with  a  heartier  zest 
and  a  mightier  sweep,  and  the  greater  the  heap 
of  your  slain,  the  more  complete  is  the  triumph 
of  your  opinion. 

But  when  the  controversy  is  concerned  with 
a  question  of  the  relations  between  labour  and 
capital,  it  is  like  a  quarrel  between  two  halves 
of  a  pair  of  scissors.  If  they  hitch  themselves 
apart  and  hack  notches  out  of  one  another, 
every  hack  that  they  make  lessens  the  cutting 
power  of  the  pair,  when  it  is  finally  joined 
together  again,  as  it  must  be  some  day.     For 


12  POVERTY  AND  WASTE 

capital  cannot  do  without  labour  any  more 
than  labour  can  do  without  capital,  and  a 
satisfactory  end  of  their  dispute  can  only  be 
reached  by  mutual  consent  and  agreement. 
If,  as  is  hard  to  believe,  it  is  economically 
impossible  for  labour  to  get  a  bigger  share 
of  the  good  things  that  it  helps  to  produce, 
there  will  be  no  end  of  the  controversy  until 
labour  is  convinced  of  the  fact  by  fair  and 
evident  proof.  No  exertion  of  force  by  the 
governing  classes  will  have  any  long-lived 
effect.  If,  on  the  other  hand,  labour  can  and 
ought  to  make  its  claim  good,  it  can  only  do 
so  by  putting  it  forward  in  a  way  that  will 
compel  respectful  attention.  It  has  much  in 
its  favour — great  political  power  if  it  knew 
how  to  wield  it  with  judgment,  and  wide 
sympathy  backed  by  the  awakened  conscience 
of  many  thousands  among  the  richer  classes 
who  feel  uncomfortable  in  the  possession  of 
wealth,  because  they  know  that  the  many  live 
under  conditions  which  are  a  reproach  to 
the  rest  of  the  community.  This  being  so,  the 
workers  are  only  spoiling  a  great  chance  by 
disunion  among   themselves,   and  a    tendency 


INTRODUCTORY  13 

to  disregard  agreements,  which  makes  it  diffi- 
cult for  employers  to  arrive  at  any  arrange- 
ment which  they  can  count  on  as  binding.  Just 
as  forcible  repression  of  the  claims  of  the 
workers  will  never  serve  as  a  lasting  remedy 
against  them,  so  these  claims  will  never  win 
a  lasting  victory  by  violent  and  unfair  means. 
It  is  not  a  case  of  war,  but  of  a  bargain,  and  it 
is  the  essence  of  a  bargain  that  it  should  be 
agreed  to,  and  recognized  as  just,  by  both 
the  parties  to  it.  Otherwise  it  is  no  bargain, 
but  an  extortion  which  will  be  cancelled  and 
avenged  as  soon  as  the  wronged  party  gets 
his  chance. 

All  these  platitudes  ought  to  be  obvious 
enough,  but  in  fact  they  are  often  forgotten. 
So  much  so  that  it  seems  to  be  necessary  to 
put  in  a  plea  for  a  little  sweet  reasonableness 
on  this  subject,  and  above  all  for  a  clearer 
understanding  of  it.  The  voice  of  public  opinion 
will  speak  on  this  question  with  weighty  effect, 
and  there  are  many  among  those  whose  private 
thought  is  finally  rolled  together  into  public 
opinion,  who  would  gladly  understand  more 
about  these  difficult  problems  if  they   could 


14  POVERTY  AND  WASTE 

find  some  statement  of  them  which  is  not  too 
technically  obscure. 

To  provide  such  a  statement  is  the  object 
of  this  book,  and  in  so  doing  to  make  some 
suggestions  as  to  what,  if  anything,  may  be 
done  by  the  ordinary  private  citizen  towards 
helping  to  bring  about  a  better  state  of  things 
in  the  business  affairs  of  the  world.  Many  of 
us  are  tired  of  the  modern  tendency  to  cry  out 
for  the  Government  to  do  something,  and  in 
the  meantime  to  do  nothing  ourselves  :  not 
necessarily  because  we  do  not  think  that  the 
Government  ought  to  do  much  more  than  it 
does,  and  much  faster,  but  because  we  know 
that  there  are  very  great  difficulties  in  the  way 
of  getting  things  done  by  Government,  whereas 
whatever  the  ordinary  citizen  can  do,  he  can 
do  at  once.  In  this  case  the  call  to  action  on 
the  part  of  the  individual  is  all  the  clearer 
because,  as  I  hope  to  show,  he  is  himself,  as 
consumer  and  buyer  of  goods  and  services, 
a  cause  of  much  of  the  poverty  that  is  a  blot 
on  our  civilization. 


CHAPTER  II 

THE  WEALTH  HEAP 

Every  year  mankind  produces  a  certain  amount 
of  goods  and  services.  Some  of  the  goods  that 
we  make  or  win,  such  as  bread  or  milk,  are 
produced  to  be  immediately  and  literally  con- 
sumed— eaten  or  drunk  and  seen  no  more. 
Some,  such  as  clothes,  are  consumed  in  an 
economic  sense  as  soon  as  the  buyer  has  taken 
them  off  the  market,  but  are  not  consumed,  in 
the  sense  of  being  worn  out,  for  a  length  of 
time  that  varies  with  the  stoutness  of  the 
stuff  and  the  taste  and  wealth  of  the  buyer. 
Some,  such  as  houses,  railways,  or  canals,  may 
last  for  centuries  if  kept  in  repair.  A  very 
few,  such  as  diamonds,  will  last  as  long  as  our 
world  exists. 

The  services  that  we  render  are  nearly  all 
momentary,  as  far  as  their  economic  effect  is 


i6  POVERTY  AND  WASTE 

concerned.  If  a  doctor  restores  his  patient 
to  health,  the  effect  on  the  patient's  body  may 
last  as  long  as  he  does,  but  the  doctor's  service 
is  closed  economically,  as  soon  as  the  patient 
has  paid  the  bill.  The  doctor  does  not  get  rent 
for  it  as  he  would  from  a  house  that  he  had 
built,  and  the  patient  has  not  bought  anything 
that  he  can  take  off  and  sell  as  he  could  a  suit 
of  clothes.  Perhaps  the  most  important,  econo- 
mically, of  all  the  services  is  that  rendered  by 
the  transport  agencies,  the  ships  and  railways 
and  carriers'  carts  and  motor  lorries  and 
caravans,  that  take  goods  from  the  places  where 
they  are  grown  or  made  and  put  them  down 
in  the  places  where  they  are  wanted  by  buyers. 
This  service  is  clearly  consumed  as  fast  as  the 
goods  that  have  been  moved  are  bought  and 
used. 

These  goods  and  services  that  mankind  is 
continually  producing,  added  to  the  existing 
stock  of  those  goods  which  still  have  an  ex- 
changeable value — that  is,  can  still  be  sold  for 
money — make  up  the  world's  wealth.  The 
faster  they  are  turned  out,  and  the  better  is 
their   quaJity,    the   greater   is   the   wealth   of 


THE  WEALTH  HEAP  17 

mankind.  And  one  of  the  reasons  why  so 
many  people  have  been  disappointed  by  man's 
economic  progress  in  the  last  century  is  because, 
in  spite  of  the  marvellous  quickening  in  the 
output  of  goods  and  services,  we  do  not  seem 
to  be  any  nearer  to  the  Psalmist's  ideal  of  "no 
complaining  in  our  streets."  On  the  contrary, 
from  the  underpaid  workman  who  cannot  buy 
a  good  meal  and  the  harassed  millionaire  who 
cannot  digest  one,  the  chorus  of  complaint 
rises  in  inharmonious  unison.  There  must  be 
something  wrong  with  the  management  of  the 
matter. 

Management  in  the  matter  does  not  exist, 
and,  as  things  are  at  present  arranged  in  human 
society,  cannot  exist.  The  whole  business  is 
left  to  hazard.  Goods  and  services  are  turned 
out  for  the  market  according  to  the  producers' 
forecasts  of  the  profits  that  they  hope  to  be 
able  to  make  by  selling  them.  Probably  the 
influences  which  turn  producers  into  one  line 
of  production  or  another  are,  in  most  cases, 
purely  accidental.  A  boy  goes  into  a  trade  or 
business  because  there  happens  to  be  an  open- 
ing, and  he  wants  to  make  a  living  somehow. 


i8  POVERTY  AND  WASTE 

There  is  very  little  choice  for  most  of  us,  and 
the  choice  is  generally  made  long  before  the 
individual  has  any  reasoned  opinions  on  the 
subject.  But  in  so  far  as  any  judicious  choice 
of  an  industry  or  business  is  possible,  the 
greatest  number  and  keenest  activity  of  those 
who  provide  for  the  needs,  real  and  imaginary, 
of  mankind,  will  tend  to  devote  themselves 
chiefly  to  turning  out  those  goods  and  services 
on  which  the  profit  is  expected  to  be  biggest. 
There  is  no  benevolent  despot  who  can  say, 
"  Thousands  of  my  people  cannot  get  enough 
bread  and  beef.  See  to  it  that  ten  more 
regiments  of  my  productive  army  are  set  to 
work  to  grow  corn  and  raise  cattle."  The 
productive  army,  being  at  work  for  the  profit 
of  its  officers  and  rank  and  file,  works  along 
the  line  of  most  profit,  being  sensible  business 
men,  with  no  sentimental  illusions. 

It  was  the  belief  of  old-fashioned  economists 
that  if  only  everybody  was  left  free  to  pursue 
his  own  interests,  the  best  possible  state  of 
economic  welfare  would  somehow  or  other 
emerge.  Partly  because  the  complete  freedom 
demanded  by  them  could  not  be  given  in  any 


THE  WEALTH  HEAP  19 

human  and  humane  society,  this  cheerful  theory 
has  not  yet  proved  itself  true  in  practice.  The 
net  result  of  our  haphazard  economic  system  is, 
that  a  large  part  of  mankind  is  under-fed, 
ill-clad,  and  ill-housed,  and  is  shut  off  from 
many  of  the  comforts  and  decencies  of  life, 
while  a  large  part  of  the  rest  spends  much  of 
its  time  in  wearying  itself  by  consuming  things 
that  it  does  not  really  want  and  vying  with 
itself  in  vulgar  ostentation  and  waste. 

This  being  so,  does  it  follow  that  no  remedy 
is  possible,  except  by  substituting  for  this 
system  the  benevolent  despotism  of  an  individual 
or  of  a  Socialistically  organized  State  ?  This 
would  be  a  dire  conclusion,  for  many  years  of 
argument  and  perhaps  of  bloodshed  lie  between 
us  and  the  possibility  of  either  kind  of  despotism, 
even  if  we  wanted  it.     But  it  is  not  so. 

A  remedy  would  be  found  at  once  if  those 
who  have  money  to  spend  would  grasp  and 
act  on  the  very  simple  fact  that,  since  the 
producing  power  of  mankind  is  limited,  every 
superfluous  and  useless  article  that  they  buy, 
every  extravagance  that  they  commit,  prevents 
the  production  of  the  necessaries  of  life  for  those 


20  POVERTY  AND  WASTE 

who  are  at  present  in  need  of  them.  The  man 
who  cannot  be  comfortable  without  half  a 
dozen  motor-cars  and  pursues  his  own  comfort 
by  buying  them,  thereby  takes  bread  out  of 
the  mouths  of  the  hungry.  Probably  he  is  an 
entirely  good-natured  person  who  would  not 
dream  of  harming  anybody,  and  very  likely 
imagines  that  he  is  doing  something  that  is 
good  for  trade,  and  helping  to  give  employment, 
by  buying  six  motor-cars  when  one  would  be 
quite  enough  for  him. 

This  grey-whiskered  fallacy,  which  is 
cherished  as  a  fact  by  a  majority,  probably, 
of  the  people  who  have  much  money  to  spend, 
is  the  cause  of  much  of  the  tangle  into  which 
the  business  affairs  of  mankind  have  been 
twisted.  The  fallacy  is  all  the  more  dangerous 
because  it  is  only  half  a  fallacy  and  contains 
just  enough  truth  to  be  deceptive. 

Since  the  output  of  goods  and  services  at 
any  moment  is  limited  by  the  amount  of 
labour,  capital,  and  raw  material  that  is  to 
be  had,  and  since  we  have  seen  that  most  goods 
and  nearly  all  services  are  more  or  less  quickly 
consumed,  it  follows  that  the  divisible  wealth 


THE  WEALTH  HEAP  21 

of  the  world  is  like  a  great  heap,  the  size  of 
which  cannot  be  enlarged  at  will  though  the 
articles  of  which  it  is  composed  may  vary. 
When  we  encourage  the  organizers  of  production 
to  turn  out  motor-cars,  part  of  the  wealth  heap 
will  consist  of  motor-cars.  If  there  had  not 
been  this  demand  for  motor-cars  or  some  other 
kind  of  luxury,  the  heap  would  have  consisted 
less  of  luxuries  and  more  of  necessaries,  which 
would  therefore  have  been  more  plentiful  and 
cheaper  for  those  who  need  them. 

In  other  words,  every  purchase  of  an  article 
of  luxury  stiffens  the  price  of  articles  of  necessity, 
and  makes  the  struggle  of  the  poor  still  harder. 

Let  us  test  this  contention  by  carrying  the 
argument  to  its  logical  conclusion,  and  suppose 
that  the  whole  of  humanity  were  suddenly 
converted  to  the  belief  that  luxury  is  an  un- 
pardonable sin,  and  treated  this  belief  not 
merely  as  an  article  of  faith,  but  as  a  practical 
rule  of  life.  Let  us  suppose  that  everybody 
determined  to  eat  plain  and  wholesome  meals, 
just  hearty  enough  to  keep  them  in  health  and 
good  spirits,  to  wear  neat,  well-cut  clothes, 
stout  enough  to  keep  out  wind  and  weather. 


22  POVERTY  AND  WASTE       ' 

and  to  wear  them  as  long  as  they  are  decent 
and  tidy,  to  Hve  in  comfortable  houses,  one  to 
each  family,  instead  of  over-furnished  and 
over-upholstered  barracks,  and  to  be  simple 
and  tasteful  rather  than  ostentatious  and  vulgar, 
in  hospitality  and  the  amusements  of  life. 
What  would  be  the  economic  effect  of  this  moral 
and  aesthetic  reformation  ? 

Its  effect  would  be  that  all  the  cunning 
and  untiring  effort  that  is  now  thrown  away 
on  turning  out  tasteless  vulgarities  and  extrava- 
gant superfluities  and  then  forcing  them  on 
mankind  by  an  elaborate  and  enormously 
costly  system  of  advertising  and  circularizing 
and  touting  in  all  its  forms,  would  be  compelled 
to  turn  its  attention  to  growing  and  making  and 
forwarding  and  selling  things  that  are  really 
wanted  and  really  useful.  The  great  heap  of 
the  world's  wealth  would  be  as  big  as  ever — 
even  bigger  as  I  hope  presently  to  show — but  a 
large  part  of  it  that  now  consists  of  tinsel  toys 
and  absurdities  and  worse,  would  have  been 
replaced  by  good  food,  good  clothes,  good  houses, 
and  healthy  amusements. 

"  And   what   good   will   have   been   done," 


THE   WEALTH   HEAP  23 

comes  the  obvious  retort,  "  if  you  have  not 
in  the  meantime  increased  the  buying  power 
of  the  poor  ?  There  would  be  a  glut  of  goods 
with  no  buyers."  So  there  would.  But  in 
the  first  place,  even  if  the  actual  money  wages 
of  the  workers  had  not  been  raised,  their  buying 
power  would  have  been  increased  by  the 
cheapening  of  the  necessaries  of  their  lives, 
and  they  would  have  more  to  spend  on  things 
that  are  now  beyond  their  reach,  but  are  looked 
on  as  necessaries  by  those  who  have  been  trained 
in  a  more  comfortable  school.  Even  in  the 
present  state  of  the  wealth-heap,  a  glut  of 
unsaleable  goods  is  sometimes  to  be  seen,  not 
because  the  goods  are  not  wanted,  but  because 
those  who  want  them  cannot  pay  for  them  the 
price  that  the  producer  has  to  get  if  he  is  to  make 
a  profit.  The  producer's  price  depends  largely 
on  that  of  his  raw  material.  Raw  materials 
are  dear  in  these  days,  because  production  is 
so  busy  with  luxuries  that  the  supply  of  raw 
material  for  real  wants  has  not  kept  pace  with 
demand.  This  is  one  of  the  evils  that  our 
supposed  reformation  would  help  to  cure. 

Moreover,  this  same  reformation  would  have 

c 


24  POVERTY  AND  WASTE 

wrought  a  great  change  that  we  have  not  yet 
considered.     We  have  not   yet   decided  what 
the  well-to-do  classes  would  do  with  all  the 
money   that   they   saved   by   treating   luxury 
as  an  unpardonable  sin  and  forswearing  extra- 
vagance   and    ostentation.     They    could    only 
do  three  things  with  it.     They  might  hoard  it 
and  bury  it,  but  there  is  no  reason  to  suppose 
that  they  would  do  anything  so  stupid.     They 
might  give  it  away  to  their  poorer  neighbours. 
If  they  did  so,  they  would  be  increasing  the 
buying  power  of  the  poor,  and  our  problem  is 
solved.     If  they  did  it  well  and  carefully  and 
in  the  right  spirit,  no  harm  would  be  done,  but 
it  would  be  very  dangerous,  for  bad  giving  is 
a  cause  of  much  evil,  and  in  any  case  it  would 
not  be  a  good  arrangement  to  have  a  large 
part  of  the  population  living  on  the  charity 
of    others.     Not    charity,    but    work    at   good 
wages  is  what  is  wanted,  and  would  probably 
be  forthcoming.     For  though  the  pleasure  of 
giving  away  would  be  indulged  in  more  freely, 
it  is  likely  that  most  of  the  huge  sum  that  would 
be  saved,  if  we  drove  the  sin  of  luxury  out, 
would  be  invested. 


THE  WEALTH  HEAP  25 

I  can  see  fastidious  readers  shudder  when 
they  find  themselves  faced  by  this  sordid 
bathos.  "  After  all  this  preamble,"  I  hear 
them  exclaim,  "  about  the  sin  of  luxury  and 
a  moral  and  sesthetic  reformation,  you  bring 
us  down  with  a  bump  on  Thrift,  that  meanest 
and  ughest  of  all  the  so-called  virtues,  the 
first  and  last  refuge  of  the  craven  and  the 
dullard." 

Now  I  fully  admit  that  thrift,  as  an  end  in 

itself,  is  a  very  unattractive  quality  in  the  eyes 

of  most  people,  and  that  it  is,  in  fact,  often 

found  in  partnership  with  other  quahties  that 

are   still   more   justly    despised.     From    thrift 

to  meanness  and  from  meanness  to  hypocrisy 

are  short  steps.     It  is  safe  to  assume  that  Mr. 

Joseph   Surface   always   kept   his   expenditure 

well  within  his  income,  while  his  spendthrift 

brother    Charles    was    a   model    of   generosity 

(with  other  people's  money),   and  of  all  the 

other  manly  virtues.    To  save  money,  merely 

for  the  sake  of  saving,   after  one   has  made 

due  provision  for  one's  old  age  and  for  any 

dependants  for  whom  one  may  be  responsible, 

is   a   pastime    that    is    open    to   question   on 


26  POVERTY  AND  WASTE 

many  grounds.  But  I  submit  that  I  have 
not  put  forward  thrift  as  an  end  in  itself,  but 
only  observed  that  it  would  be  a  by-product 
of  the  supposed  reformation  that  has  turned 
all  mankind  against  luxury.  A  large  sum  of 
money  that  is  now  spent  on  the  production 
and  distribution  of  useless  and  often  vulgar 
luxuries  would  thereby  be  saved  and  invested, 
either  by  those  who  saved  it,  or  by  their  bankers, 
if  they  left  it  at  their  banks. 

In  other  words,  capital  would  be  accumulated 
very  much  faster.  Capital,  and  its  rights  and 
rewards,  are  a  difficult  question,  which  will  be 
dealt  with  more  fully  in  a  later  chapter.  At 
present  you  must  allow  me  to  assert  that  capital 
can  only  be  got  by  being  saved,  and  that  the 
lack  of  capital,  in  relation  to  the  world-wide 
demand  for  it  in  these  days  of  rapid  develop- 
ment all  over  the  globe,  is  one  of  the  most 
serious  problems  with  w^hich  the  business  world 
has  lately  had  to  struggle. 

Profitable  and  useful  enterprises  in  every 
country  have  to  wait  for  lack  of  capital  to 
put  them  in  hand.  To  mention  merely  one 
or  two  examples  at  home,  there  was  lately  a 


THE  WEALTH  HEAP  27 

Royal  Commission  on  the  Canals  and  Water- 
ways of  Great  Britain,  which,  after  an  exhaus- 
tive inquiry,  recommended  a  scheme  by  which 
inland  communication  would  have  been  greatly 
improved  and  cheapened,  and  some  at  least 
of  the  capital  and  skill  sunk  by  our  forefathers 
in  canals  would  have  been  made  reproductive 
again  after  being  throttled  and  buried  by  the 
short-sighted  jealousy  of  the  railway  companies. 
The  Commission's  report  has  been  left  to  rot 
Uke  the  old  canals  largely  because  it  would 
have  cost  too  much  to  raise  the  capital,  owing 
to  its  recent  scarcity  and  dearness. 

Again,  consider  all  the  schemes  that  have 
been  put  forward,  with  or  without  an  ofhcial 
blessing,  for  improving  communication  in 
London,  reheving  its  congested  traffic,  and 
actually  saving  the  lives  of  hundreds  of  its 
citizens  who  are  killed,  merely  because  they  try 
to  cross  the  road  at  the  wrong  moment.  Capital 
has  been  too  scarce  and  dear  for  the  problem 
to  be  tackled  on  a  large  scale.  All  over  the 
country  there  are  big  things  waiting  to  be  done 
to  equip  this  old  land  and  help  it  to  grow  more 
stuff  for  us,  and  to  bring  the  good  stuff  from 


28  POVERTY  AND  WASTE 

the  grower  to  the  user.  With  capital  plentiful 
and  cheap  and  the  energy  of  the  people  put  into 
the  work,  it  might  multiply  its  output  manifold. 

From  all  this  it  follows  that  if  expenditure 
on  luxuries  were  turned  into  accumulation  of 
capital,  and  capital  became  plentiful  and  cheap, 
there  are  plenty  of  profitable  uses  to  which 
it  might,  and  would,  be  put.  Whence  it  follows 
that  another  by-product  of  the  mental  reforma- 
tion I  have  supposed  would  be  a  quickened 
demand  for  labour  to  carry  out  all  this  work 
that  is  crying  out  to  be  done.  And  so  after  a 
roundabout  journey  we  have  arrived  at  an 
answer  to  the  very  pertinent  objection,  that 
it  would  be  no  use  to  increase  the  supply  of  the 
necessaries  of  life  if  the  buying  power  of  the 
poor  were  not  raised  at  the  same  time.  The 
buying  power  of  the  poor  would  be  raised,  and 
so  they  would  be  able  to  take  advantage  of  the 
greater  supply  of  necessaries,  because  the  better 
and  cheaper  supply  of  capital  would  enable 
many  fruitful  enterprises  to  be  taken  in  hand, 
and  so  would  increase  the  demand  for  labour, 
diminish  unemployment,  and  raise  wages. 

It  may  fairly  be  urged  that  profits  would  be 


THE  WEALTH  HEAP  29 

lessened,  because  the  profits  made  by  supplying 
luxuries  to  the  rich  are  probably  greater  than 
those  to  be  got  by  providing  necessaries  for 
the  poor.  This  may  be  so,  though  the  huge 
profits  made  by  Coats  in  supplying  sewing 
cotton  and  by  the  cheap  catering  companies 
are  an  example  to  the  contrary,  showing  that 
a  big  and  regular  turnover  of  a  cheap  article 
may,  with  good  management,  leave  little  to 
be  desired  in  the  matter  of  earnings.  But  even 
if  it  were  so,  it  is  safe  to  contend  that  profits 
would  gain  in  stability  what  they  lost  in  dimen- 
sions. Industry  would  be  less  hazardous.  Profits 
might  be  smaller,  but  losses  would  be  fewer, 
and  the  whole  business  would  be  on  a  more 
soUd  basis  if  the  real  wants  of  mankind,  which 
are  continuous  and  can  always  be  counted 
on,  were  being  supplied,  than  it  is  now,  when 
much  of  the  energy  of  manufacturers  and  traders 
goes  into  trying  to  forecast  the  whims  and 
caprices  of  fashion,  or  into  creating  a  demand,  by 
advertising  and  other  devices,  for  so-called 
goods  that  they  have  produced  and  are  now 
determined  to  force  down  the  public  throat. 
"  But  even  if  all  this  be  true,"  I  may  be 


30  POVERTY  AND  WASTE 

told,  "  what  will  have  happened  to  all  the 
thousands  of  people  who  will  certainly  have  been 
thrown  out  of  work  by  your  supposed  reforma- 
tion ?  What  will  be  the  fate  of  all  those 
who  had  hitherto  been  busy  making,  handling, 
and  selling  luxuries,  and  would  probably  find 
it  difficult  to  adapt  themselves  to  other  kinds 
of  work  ?  Why  should  they  have  to  suffer 
because  their  public  suddenly  discovered  that 
luxury  was  an  evil  ?  " 

This  would  certainly  be  a  valid  objection, 
if  it  were  possible  that  the  change  which  I  have 
supposed  took  place  by  some  miracle  all  in  a 
moment.  But  these  miracles  do  not  happen, 
and  nobody  wants  them.  In  business  matters 
violent  change  of  any  kind  always  brings 
damage  and  loss  behind  it.  It  is  because 
business  men  know  this  that  they  are  usually 
so  cautious  and  conservative  and  slow  to  move. 
The  most  beneficent  economic  reforms  have  to 
be  carried  out  by  very  short  steps.  If,  for 
example,  we  could  abolish  the  middleman 
to-morrow  and  get  all  our  goods  straight  from 
the  makers  and  growers,  not  only  would  all 
the   middlemen — honest   human   beings,    after 


THE   WEALTH  HEAP  31 

all,  who  earn  a  living  in  the  manner  that  their 
fate  has  decreed — be  thrown  on  the  rates,  but 
all  those  who  had  ministered  to  their  wants 
would  be  mourning  the  loss  of  good  customers, 
and  it  might  take  years  to  live  down  the  conse- 
quent dislocation  of  trade. 

In.  this  matter  of  lessening  the  expenditure 
on  luxuries,  we  need  have  no  fear  that  anything 
will  happen  so  hurriedly  as  to  throw  many 
people  out  of  work.  The  notion  is  now  so 
ingrained  in  the  minds  of  the  rich  that  it  is 
their  duty  to  spend  their  money  freely,  and  the 
middle  class  is  so  sturdily  convinced  that  an 
extravagant  scale  of  living  is  a  sign  of  pros- 
perity and  respectability  and  distinction,  that 
we  need  cherish  no  such  apprehension. 

Before  we  need  expect  to  see  those  who  turn 
out  luxuries  coming  on  the  parish,  two  things 
must  happen.  One  is  a  radical  change  in  taste, 
involving  the  death  of  the  absurd  behef  that 
because  a  thing  is  dear,  and  our  next-door 
neighbour  has  got  it,  it  is  therefore  desirable. 
The  other  is  the  comprehension,  by  those  who 
have  superfluous  money  to  spend,  of  the  fact 
that   by   buying   luxuries   they   are   stiffening 


32  POVERTY  AND  WASTE 

the  price  of  necessaries  and  so  making  the  poor 
poorer.  Need  we  fear  that  these  two  things 
will  happen  with  any  alarming  celerity  ? 

If  they  could  happen  at  all,  the  process 
would  be  so  gradual,  the  leavening  of  the  lump 
would  be  so  slow,  that  no  cataclysm  could 
occur  in  the  fortunes  of  those  who  provide 
dear  and  unnecessary  fripperies.  For  even  if 
a  large  number  of  people  were  convinced  that 
the  purchase  of  luxuries  made  necessaries  dearer, 
many  of  them  would  probably  comfort  them- 
selves with  the  belief  that  it  would  be  useless 
for  them  to  make  any  change  in  their  mode 
of  spending,  because  the  volume  of  trade  is  so 
huge  that  the  action  of  one  individual  would 
be  lost  like  a  drop  in  the  ocean.  The  movement 
could  only  grow  by  here  one  and  there  another 
deciding  that  he  or  she,  at  least,  would  not  be 
responsible  for  warping  the  true  course  of 
industry,  which  ought  to  be  directed  to  supplying 
the  bare  needs  of  all  before  it  turns  out  frills 
and  furbelows  for  anybody. 

And  what  of  Malthus  and  his  doctrine  that 
mankind  will  always  breed  itself  on  to  the 
verge  of  starvation  ?     Is  not  this  law  going 


THE  WEALTH   HEAP  33 

to  upset  all  the  effects  of  any  such  reform  even 
if  it  could  be  set  to  work  ?  There  is  no  need 
to  be  afraid  of  Malthus,  for  as  he  himself  saw, 
the  working  of  his  law  can  be  modified  or  even 
stopped  by  opposing  influences.  It  is  not 
true  that  mankind  necessarily  breeds  up  to 
the  margin  of  subsistence.  The  richer  and 
more  civilized  a  nation  becomes,  the  slower  is 
its  rate  of  breeding,  especially  among  the  com- 
fortable classes.  This  is  so  generally  true  that 
if  the  poorer  classes  were  made  more  comfortable, 
so  that  their  prudence  and  self-respect  had  more 
chance  of  exerting  their  influence,  it  is  much  more 
likely  that  we  should  have  to  encourage  them  to 
multiply,  than  that  we  should  find  them  bringing 
into  the  world  more  mouths  than  could  be  fed. 

Yet  another  objection  may  be  foreseen  and, 
I  think,  answered.  It  may  be  contended  that 
if  mankind  were  to  give  up  luxury  and  extra- 
vagance, and  buy  only  what  it  needed  for  a 
pleasant  and  wholesome  and  happy  life,  the 
incentive  to  amass  wealth  would  be  lessened, 
and  that  therefore  the  wheels  of  industry  would 
go  round  more  slowly,  because  there  would  be 
fewer  eager  spirits  to  keep  them  spinning  for 


34  POVERTY  AND  WASTE 

the  sake  of  the  profits  that  they  hope  to  gain, 
I  think  this  objection  is  based  on  a  complete 
misunderstanding  of  the  real  reasons  which  make 
men  work. 

People  do  not  work  for  wealth  in  order  that 
they  may  spend  it  on  palatial  mansions  in  which 
they  are  very  uncomfortable,  profuse  and  vulgar 
entertainments  which  probably  disgust  the 
successful  worker  and  make  him  despise  those 
who  accept  his  hospitality,  acres  of  sporting 
rights  which  they  only  visit  for  two  or  three 
days  in  the  year,  and  other  forms  of  luxury, 
the  absurdity  and  futihty  and  wastefulness  of 
which  are  rather  clearer  to  a  man  of  business 
than  to  any  one  else.  I  am  not  sure  that 
many  of  us  work  for  wealth  at  all,  but  on  that 
point  more  anon.  Those  who  do,  if  any,  would 
not  think  of  throwing  their  wealth  about  in 
the  stupid  manner  now  prevalent,  if  they  were 
not  encouraged  to  do  so  by  the  belief  that  only 
thus  can  they  win  their  way  to  distinction  and 
a  place  in  what  is  called  Society.  If  the  cultured 
classes — or  the  classes  which  ought  to  be 
cultured — took  to  heart  the  fact  that  expendi- 
ture on  luxuries  makes  the  poor  poorer,  and  set 


THE  WEALTH  HEAP  35 

a  different  standard  before  themselves  and  those 
who  want  to  win  a  way  into  their  ranks,  the 
desire  to  work,  and  to  grow  rich,  would  remain 
as  strong  as  ever. 

For  most  men  work  because  they  want  to 
work.  "  Every  man,"  says  Addison's  Spectator, 
*'  has  such  an  active  principle  in  him  that  he  will 
find  .out  something  to  employ  himself  upon  in 
whatever  place  or  state  of  life  he  is  posted."  * 
A  really  idle  wastrel  can  always  live  on  some- 
body. But  a  healthy-minded  man  wants  to 
get  something  done,  to  express  himself  somehow, 
and  to  be  able  to  feel  when  he  is  laid  on  the 
shelf  that  he  has  done  his  share  of  work  in  the 
world.  Even  when  he  has  done  so  he  often 
cannot  bear  to  be  idle.  It  is  pathetic  to  see 
men  who  have  come  home  pensioned  off  in  early 
middle  age,  after  spending  the  best  years  of 
their  lives  in  dealing  out  order  and  justice  in 
India  or  some  other  exhausting  tropical  climate, 
instead  of  settling  down  peacefully  and  growing 
roses  and  reading  books  and  taking  their  well- 
earned  leisure,   moving  heaven   and   earth   to 

•  No.  15.     "Sir  Roger  de  Coverley  Harehunting."    The 
essay  was  written  by  Budgell. 


36  POVERTY  AND  WASTE 

get  a  post  as  secretary  to  a  golf  club,  or  as 
director  of  a  company. 

Many  men  hope  to  go  on  working  in  the 
next  world ;  witness  the  well-known  story  of 
the  dying  engine-cleaner,  who,  after  listening 
to  a  description  of  the  joys  of  Paradise  from  the 
clergyman  who  was  cheering  his  last  moments, 
murmured  the  hope  that  Almighty  God  would 
let  him  have  an  engine  and  a  bit  of  oily  rag. 

This  desire  for  work,  as  an  end  in  itself, 
is  especially  strong  in  the  great  organizers  of 
industry,  on  whose  energy  and  enterprise  the 
speed  and  success  of  production  depends. 
They  are  usually  men  of  most  simple  tastes, 
who  spend  on  themselves  a  minute  fraction  of 
their  wealth. 

That  men  do  not  work  for  wealth  is  also 
shown  by  the  action  of  those  very  few  who  have 
any  choice  in  the  matter  of  the  work  that  they 
do.  They  seldom  choose  a  profession  or  occupa- 
tion because  its  rewards  are  fat.  The  intel- 
lectual flower  of  the  Universities — the  men  whose 
degree  and  record  put  the  world  at  their  feet — 
show  what  they  think  of  wealth  as  an  incentive 
to  work  by  almost  always  going  into  some  line 


THE   WEALTH   HEAP  37 

of  life  in  which  the  monetary  prizes  are  few  and 
hard  to  reach.  They  become  schoolmasters, 
civil  servants,  journalists,  barristers,  dons, 
doctors,  parsons,  politicians.  They  know  quite 
well  that  thereby  they  are  not  likely  to  earn 
as  much  as  the  men  who  go  into  business,  but 
this  fact  does  not  weigh  with  them  for  a  moment. 
They  deliberately  leave  the  more  profitable 
fields  to  those  whom  they  have  beaten  in  the 
intellectual  lists.  The  ranks  of  the  commercial 
world  are  recruited  chiefly  by  men  who  have 
either  not  been  to  a  University  at  all,  or  have 
not  achieved  distinction  in  the  Schools. 

At  the  same  time  it  is  true  that  when  men 
work  they  want  to  get  as  much  reward  as  pos- 
sible for  the  work  that  they  do.  A  man  may 
choose  to  earn  a  pittance  as  a  writer  rather  than 
draw  thousands  a  year  from  the  family  business 
like  his  less  gifted  brother.  But  being  a  writer 
he  likes  to  sell  his  stuff  well,  and  be  sought 
after  by  editors  and  publishers,  because  thereby 
he  is  able  to  lay  the  flattering  unction  to  his 
soul  of  thinking  that  he  has  succeeded  and  has 
done  good  work.  This  is  the  truth  that  is 
behind    Lord    Melbourne's   well-known    saying 

141442 


38  POVERTY  AND  WASTE 

that  "  Politicians  are  not  venal,  but  they  are 

d d  vain."     Politicians,  like  the  rest  of  us, 

do  not  want  mere  money,  but  distinction 
and  the  feeling  of  having  achieved  something. 
This  rather  praiseworthy  craving  Melbourne's 
cynical  humour  twisted  into  vanity.  Trollope's 
analysis  of  Archdeacon  Grantly's  feelings  is 
another  apt  example.  "  Our  Archdeacon,"  he 
says,  "  was  worldly — who  among  us  is  not  so  ? 
He  was  ambitious — who  among  us  is  ashamed 
to  own  that  *  last  infirmity  of  noble  minds '  ? 
He  was  avaricious,  my  readers  will  say.  No — 
it  was  for  no  love  of  lucre  that  he  wished  to  be 
bishop  of  Barchester.  .  .  .  He  would  be  a 
richer  man  as  archdeacon  than  he  could  be  as 
bishop.  But  he  certainly  did  desire  to  play 
first  fiddle ;  he  did  desire  to  sit  in  full  lawn 
sleeves  among  the  peers  of  the  realm ;  and  he 
did  desire,  if  the  truth  must  out,  to  be  called 
'  My  Lord '  by  his  reverend  brethren." 

A  few  lofty  souls  can  rely  on  the  approval 
of  their  own  judgment  and  can  follow  their 
art  or  craft  for  its  own  sake,  but  the  ordinary 
man  wants  to  know  that  he  is  turning  out  what 
other  people  want  and  like  and  admire,  and 


THE  WEALTH  HEAP  39 

the  payment  that  he  gets  is  the  rough-and- 
ready,  but  very  practical,  test  of  his  achievement. 

It  is  only  in  this  sense  that  most  men  work 
for  wealth.  They  work  for  success  and  dis- 
tinction, and  wealth  is  the  badge  and  sign 
manual  thereof.  This  is  especially  true  of 
success  in  industry  and  business.  A  writer 
or  a  teacher  or  a  preacher  may  win  distinction 
and  success  by  a  limited  appeal  to  a  small 
circle,  without  ever  earning  the  applause  that 
is  expressed  in  a  bank  balance.  The  business 
man  is  judged  by  sheer  weight  of  metal — if  he 
works  for  his  own  hand  by  the  fortune  that  he 
makes,  if  he  is  the  servant  of  a  company,  by 
the  dividends  that  he  earns  for  his  share- 
holders. 

Since  these  things  are  so — since  most  men 
work  because  they  want  to,  and  work  for  success, 
not  in  order  to  be  able  to  indulge  in  absurd 
extravagances  which  most  men  of  business 
despise — we  need  have  no  fear  that  a  change 
in  sentiment  about  spending  would  blunt  the 
edge  of  the  spur  to  work,  and  so  check  the 
speed  of  industrial  progress. 

If  the  classes  which  set  the  fashion  in  these 


D 


40  POVERTY  AND  WASTE 

things  would  recognize  that  the  extravagance 
which  they  thought  was  good  for  trade  was  really 
making  it  harder  for  the  poor  to  get  the  necessaries 
of  life,  men  who  had  grown  rich  in  industry  would 
still  find  plenty  of  ways  for  gaining  the  dis- 
tinction that  is  their  very  natural  ambition  by 
spending  their  money  in  some  astonishing  fashion 
that  would  arrest  the  gaze  of  their  fellows.  The 
only  change  would  be  that  the  objects  of  their 
expenditure  would,  from  the  sheer  force  of 
circumstances,  be  something  useful  and  sensible, 
or,  at  least,  something  that  was  meant  to  be 
useful  and  sensible.  Plenty  of  mistakes  would 
still  be  made,  but  the  object  aimed  at  would 
be  something  better  than  the  "  freak  banquets," 
and  the  other  economic  atrocities  and  outrages 
against  good  taste,  by  which  too  many  rich  men 
at  present  think  it  necessary  to  call  attention 
to  their  success. 


CHAPTER  III 

THE   CLAIMS   OF  CAPITAL 

In  the  last  chapter  it  was  asserted  that  lack 
of  capital  stands  in  the  way  of  many  profitable 
and  useful  enterprises  that  are  waiting  to  be 
taken  in  hand,  and  that  if  people  saved  more 
there  would  be  more  capital  to  be  had.  As 
capital  is  rather  a  difficult  matter,  it  is  better 
to  make  this  clear  before  we  go  any  further. 

Capital  is  defined  by  economists  as  wealth 
set  aside  to  be  used  in  production.  A  certain 
amount  of  it  is  necessary  before  any  industry 
can  begin  its  work  ;  because  industry  implies 
making  or  growing  something,  and,  during 
the  process  of  making  or  growing,  those  who 
are  at  work  have  to  be  kept  alive  out  of  a 
store  that  has  been  set  aside  beforehand  to 
that  end.  Professor  Walker's  well-known  ex- 
ample is  that  of  a  member  of  a  savage  tribe, 
living  precariously  on  fish   "  caught  from  the 


42  POVERTY  AND  WASTE 

rocks  which  jut  into  the  sea,"  who  lays  up  a 
store  of  dried  fish,  and  keeping  himself  alive 
thereon,  makes  himself  a  canoe,  and  thereafter 
can  "  paddle  in  it  out  to  the  *  banks '  which 
lie  two  or  three  miles  from  shore,  where  in  one 
day  he  can  get  as  many  fish  as  he  could  catch 
from  off  the  rocks  in  a  week."  * 

His  store  of  dried  fish  was  his  capital,  which 
he  reserved  from  consumption  and  kept  to 
live  on  while  making  his  canoe.  Having  done 
so,  he  has  put  his  capital  into  a  canoe  and  can 
let  it  out  to  his  neighbours,  taking  payment  from 
them  in  the  form  of  part  of  their  catch,  on  which 
he  can  live,  while  he  himself  builds  more  canoes 
and  sells  them  in  exchange  for  the  labour  of 
the  rest  of  the  tribe.  The  point  at  which  he 
left  off  being  a  mere  hand-to-mouth  worker 
and  consumer  and  became  a  capitalist,  was 
when,  instead  of  eating  all  the  fish  that  he 
caught,  he  saved  some  and  dried  them  so  that 
he  might  be  kept  alive  while  he  carried  out 
his  canoe-building  venture.  "  At  every  step 
of  its  progress,"  says  Walker  again,  "  capital 
follows  one  law.     It  arises  solely  out  of  saving." 

*  "  Political  Economy,"  Part  II.,  cliap.  iii. 


THE  CLAIMS  OF  CAPITAL  43 

The  usual  line  of  thought  of  most  people 
who  have  not  been  specially  trained  in  these 
obscurities,  regards  capital  as  money.  They 
think  of  a  capitalist  as  a  man  who  has  a  very 
big  balance  at  his  bank  and  "  any  amount  of 
money  to  spend.'*  But  an  accumulation  of 
goods,  like  our  savage  friend's  store  of  dried 
fish,  is  what  is  really  required.  If  there  were 
no  store  of  goods  the  owner  of  money  could 
make  little  or  no  use  of  it :  he  could  only  buy 
enough  to  feed  himself  and  his  family  as  food 
was  gathered  off  the  trees  or  caught  by  huntsmen 
and  fishermen.  He  could  not  set  an  industrial 
army  to  work  because  there  would  be  no  store 
to  feed  it  with,  no  tools  for  it  to  work  with, 
and  no  materials  for  it  to  work  on. 

On  the  other  hand,  if  a  Socialist  Government 
were  to  abolish  money  and  distribute  to  its 
citizens  food  and  other  comforts  according  to 
what  it  thought  to  be  their  needs  and  deserts, 
industry  could  go  ahead  merrily  enough  as  long 
as  there  was  a  store  of  accumulated  goods,  so 
that  the  industrial  army  could  be  kept  alive 
until  the  work  on  which  it  was  busy  had  turned 
out  the  necessary  product.     The  capitalist  could 


44  POVERTY  AND  WASTE 

not  be  abolished  because  without  him  industry 
would  die.  But  instead  of  being  an  individual 
he  would  be  the  Government,  which  would 
have  assumed  the  command  over  the  necessary 
store  of  goods,  which  is  now  held  by  those  who 
have  money  to  spend. 

As  things  are  at  present  arranged,  the 
capitalist  does  not  save  fish  or  other  goods,  but 
money,  which  gives  him  the  power  to  buy  any 
goods  that  he  may  need  for  industrial  purposes, 
or  to  transfer  this  power  to  any  industry  to 
which  he  may  lend  his  money.  He  is  really 
doing  just  the  same  thing  as  the  savage  who 
saved  his  fish.  Instead  of  spending  his  money 
on  pleasure  and  luxury  (which  would  be  the 
equivalent  of  eating  his  fish)  he  keeps  it  to 
provide  food  and  other  equipment  for  industry. 
The  money  that  he  saves  he  invests,  that  is, 
lends  it  out  to  a  firm  or  a  company  or  munici- 
paUty  or  Government  that  is  starting  or 
expanding  a  business  or  industry,  or  building 
railways  or  roads  or  tramw^ays  or  ships,  or 
doing  the  hundreds  of  other  things  for  which 
capital  is  required. 

This  constant  saving  of  money  makes  the 


THE  CLAIMS   OF  CAPITAL  45 

accumulation  of  goods  that  is  necessary  to 
industry  possible.  If  no  one  saved  industry 
would  wither  and  cease.  If  everybody  lived 
up  to  his  income,  only  articles  of  daily  con- 
sumption would  be  produced.  No  one  could 
build  a  merchant  ship  or  lay  a  mile  of  railway, 
because  there  would  be  no  spare  money  to 
buy  the  iron  and  steel  for  it. 

When  once  we  have  seen  that  industry  cannot 
be  carried  on  unless  thrifty  people  save  and 
invest  money,  we  can  also  see  the  fallacy  of 
the  common  belief,  referred  to  in  Chapter  II, 
that  spending  money  on  luxuries  is  good  for 
trade.  Money  spent  on  luxuries  has  gone  into 
something  that  will  not  increase  production. 
Money  invested  in  production  will  increase 
production.  If  we  spent  £10,000  on  a 
tremendous  display  of  fireworks,  makers  of 
fireworks  would  be  benefited  and  a  glorious 
blaze  of  rockets  would  flare  for  a  few  minutes. 
If  we  spent  it  on  improving  and  extending  a 
boot  factory,  not  only  would  those  who  worked 
on  the  improvement  and  extension  of  the 
factory  be  benefited  to  the  same  extent  as 
the   makers   of   fireworks,    but   instead   of   a 


46  POVERTY  AND  WASTE 

momentary  blaze  there  would  be  the  improved 
and  extended  factory  hard  at  work  turning 
out  more  boots,  paying  more  wages,  earning 
more  profits,  and  providing  new  capital  for 
its  own  replacement  when  it  is  worn  out. 

Sometimes  spending  money  on  luxuries 
actually  destroys  industry,  as  when  a  great 
magnate  lately  made  himself  a  deer  park 
in  Surrey  and  included  in  it  a  large  piece  of 
land  that  had  hitherto  been  tilled,  and  is  now 
made  into  a  beautiful  waste  for  the  benefit  of 
him  and  his  deer. 

It  was  necessary  to  lay  this  stress  on  the 
importance  of  saving,  because  the  tendency 
of  to-day  is  rather  to  regard  the  capitaHst  as 
a  well-dressed  burglar  who  exploits  the  rest  of 
society  and  fattens  on  its  sweat,  extorting  from 
it  a  share  of  its  good  things  to  which  he  has 
no  claim  in  economy  or  justice.  In  fact,  he 
is  a  quite  ordinary  human  being  who,  like  the 
rest  of  us,  makes  the  best  bargain  that  he  can 
with  the  article  that  he  has  to  sell.  This 
article  is  the  capital  that  he  has  saved.  Industry 
cannot  set  to  work  without  it,  and  so  has  to 
pay  for  the  use  of  it,  and  would  have  to  do  so. 


THE  CLAIMS  OF  CAPITAL  47 

in  one  form  or  another,  under  whatever  system 
industry  were  organised.  For  saving  would 
always  have  to  be  done  by  somebody,  even  if 
it  were  a  Socialist  Government.  In  that  case, 
it  may  be  said,  the  whole  community  would  be 
the  capitalist  and  would  get  his  reward.  So  it 
would,  but  it  would  also  have  to  earn  it,  as  he 
has,  by  making  an  effort  of  abstinence,  and 
keeping  back  part  of  its  wealth  for  production, 
instead  of  consuming  it  as  fast  as  it  was  turned 
out.  Moreover,  under  such  a  system  there 
would  have  to  be  special  officers  to  see  to  this 
business  of  accumulating  and  applying  capital, 
and  they  would  have  to  be  fed  and  supported 
out  of  the  work  of  the  rest  of  the  community. 

"  That  is  all  very  true,"  I  may  be  told,  "  in 
the  case  of  a  capitalist  who  has  saved  his  own 
capital,  but  the  bitterness  against  capital  is 
surely  justified  when  it  is  inherited,  when  the 
owner  of  it  is  a  mere  *  tenth  transmitter  of  a 
foolish  face'  and  a  big  fortune,  acquired,  per- 
haps, by  a  very  remote  ancestor  who  was  an 
active  and  successful  slave  dealer.  Or,  apart 
from  any  question  of  the  origin  of  the  fortune, 
how  can  there  be  any  sense  in  an  arrangement 


48  POVERTY  AND  WASTE 

which  allows  a  man,  because  his  great-grand- 
father made  a  large  fortune,  to  idle  through  life 
and  take  toll  of  the  toil  of  the  rest  of  mankind  ? "' 
There  is  a  great  deal  of  sound  reason  in  this 
argument,  and  it  must  at  least  be  admitted  that 
the  owner  of  inherited  wealth  above  all  men  is 
bound  to  be  extremely  careful  of  the  use  that 
he  makes  of  it,  and  to  see  that  he  does  not, 
by  buying  the  wrong  things,  warp  the  true 
course  of  industry  and  make  the  lot  of  the 
poor  harder.  For  he  owes  everything  to  the 
care  that  his  fellow-creatures  take  of  him.  He 
may  think  that  he  owes  it  all  to  his  great-grand- 
father, but  herein  he  errs.  In  a  savage  state 
of  society  no  one  could  inherit  property  and 
keep  it  unless  he  either  could  defend  it  with 
his  own  manly  prowess,  or  spend  a  large  part  of 
it  in  hiring  sturdy  fellows  to  defend  it  for  him 
— and  in  the  end  they  would  probably  decide 
that  it  was  better  to  keep  it  for  themselves. 
Now  he  gets  it  without  having  to  pay  a  penny 
except  to  lawyers  and  tax-gatherers,  and  without 
having  to  stir  a  finger  of  his  own  or  anybody 
else's  to  defend  it  against  attack.  Society 
does  everything  for  him  and  asks  nothing  in 


THE  CLAIMS  OF  CAPITAL  49 

return  for  taking  care  of  him  and  his  property 
except  a  certain  sum  in  taxation,  the  payment 
of  which  does  not  make  the  smallest  difference 
to  his  personal  comfort. 

This  one-sided  bargain  can  only  be  justified 
by  the  plea  that  we  must  have  capital  for 
industry,  and  that  we  could  not  be  sure,  as 
things  are,  that  capital  would  be  saved  unless 
those  who  saved  it  had  the  right  to  leave  it  to 
their  families  or  anybody  else  whom  they  wished 
to  enrich ;  also  that  the  owner  of  hereditary 
wealth  is  necessary,  because  it  would  require 
a  revolution  involving  economic  chaos  to  do 
away  with  him,  and  economic  chaos  is  easier 
to  let  loose  than  to  chain  up  again.  We  are 
certainly  entitled  to  demand  of  him  that  he 
should  see  the  facts  of  his  own  case  clearly  and 
should  ask  himself,  "  What  have  I  done  that 
I  should  enjoy  these  advantages  and  be  raised 
above  the  strain  and  struggle  for  life  that  is 
the  lot  of  commonplace  mankind  ?  Am  I 
using  these  advantages  in  such  a  way  as  to 
make  the  poor  still  poorer  ?  And  if  so,  is  it 
a  man's  act,  or  a  self-indulgent  waster's  ?  " 

When  the  case  has  thus  been  decided  against 


50  POVERTY  AND  WASTE 

the  owner  of  inherited  wealth,  and  he  has  been 
cautioned  as  a  suspicious  character,  let  us  then 
go  on  to  recognize  that  we  are  nearly  all  of  us 
owners,  if  not  of  inherited  wealth,  at  least  of 
inherited  earning  power,  that  we  all  of  us  owe 
any  comforts  that  we  enjoy  to  the  security 
given  to  us  by  the  society  in  which  we  live,  and 
that  the  caution  given  to  the  owner  of  inherited 
capital  apphes  to  nearly  all  of  us,  with  some 
variations  of  degree. 

All  of  us  who  have  been  provided  by  our 
parents  with  good  food  and  warm  clothes  in 
our  childhood,  and  with  a  moderate  outfit  of 
brains,  and  what  is  called  a  decent  education, 
and  have  then  been  given  a  start  in  life  from 
which  we  have  gone  on,  as  it  were,  mechanically 
and  by  the  exercise  of  most  commonplace  and 
chiefly  negative  virtues,  along  the  path  of  more 
or  less  moderate  prosperity,  have  no  cause  to 
flatter  ourselves  that  we  have  carved  out  a 
career  for  ourselves  without  any  help  from  our 
forbears. 

If  we  had  happened  to  be  born  in  a  stable 
loft  instead  of  in  the  first-floor  front  of  a  respect- 
able suburban  mansion,  our  walk  through  life 


THE  CLAIMS  OF  CAPITAL  51 

would  have  been  a  very  different  story.  And 
the  same  reflection  may  be  made  with  equal 
truth  by  the  man  who  has  been  born  in  the 
stable  loft  and  risen  through  the  ranks  of  stable 
boy  and  groom  to  the  proud  post  of  chauffeur. 
If  he  had  been  born  under  a  haystack  his  lot 
also  would  have  been  different,  and  he  has 
cause  to  thank  his  ancestors  for  much  of  his 
present  eminence.  Naked  in  body  we  come  into 
the  world,  but  already  endowed  with  germs 
of  mind  and  character  which  are  our  inherited 
earning  power.  Some  men  of  science  tell  us 
nowadays  that  heredity  is  much  less  important 
than  environment,  and  that  what  makes  a  man 
a  man  is  the  influence  of  the  surroundings  of 
his  youth.  But  these  surroundings  are  just 
what  are  provided  for  us  by  our  parents,  who 
have  had  them  provided  by  theirs. 

Even  in  the  case  of  those  who  seem  to  have 
done  everything  for  themselves,  having  been 
born  under  a  haystack  and  then  risen  by  sheer 
enterprise  and  endurance  to  be  captains  of 
industry  or  Archbishops,  do  not  they  owe  a 
big  debt  to  something  that  was  in  them  at  the 
outset,  to  say  nothing  of  luck  that  helped  them 


52  POVERTY  AND  WASTE 

over  formidable  stiles  ?  Some  queer  kink  in  one 
of  the  myriads  of  cells  that  went  to  the  making 
of  them,  a  throw-back  to  some  peculiarly  dogged 
savage  in  their  remote  ancestry — something  has 
been  given  to  them  which  was  in  fact  a  long 
start  in  the  race  of  life,  a  much  longer  one  than 
that  which  is  presented  to  the  owner  of  hereditary 
wealth.  For  it  gave  them  a  set  of  teeth  that 
could  grip  instead  of  putting  a  silver  spoon  in 
their  mouths. 

Further,  there  is  this  to  be  remembered  by 
those  who,  because  they  have  risen  to  the  enjoy- 
ment of  big  incomes  in  return  for  work  that 
they  do,  flatter  themselves  that  they  have 
earned  their  claim  to  a  large  share  of  the 
world's  goods,  and  can  spend  their  money  as 
Jbest  pleases  them.  Big  incomes  are  not  always 
earned  by  the  best  work,  and  are,  in  fact,  largely 
a  matter  of  hazard.  There  is  little  or  no  logical 
relation  between  the  work  that  a  man  does 
and  the  pay  that  he  gets.  "  No  conceivable 
law  of  political  economy  accounts  for  the  fact 
that  the  labourers  of  Devonshire  receive  175.  9^. 
a  week,  and  those  of  Oxfordshire  14s.  iid.,  all 
included.     The  whole  wage  system  in  vast  areas 


THE  CLAIMS  OF  CAPITAL  53 

of  rural  England  ...  is  largely  determined  by 
mere  usage  and  local  precedents."  *  Usage  and 
precedent  are  also  important  elements  in  the 
wages  and  salaries  paid  to  many  besides  country 
labourers.  What  is  in  some  ways  the  most 
important  work  in  the  world  is  done  for  no  re- 
turn whatever  in  the  shape  of  direct  salary  or 
wages  paid  for  it.  The  work  of  seeing  that  we  are 
wholesomely  fed  and  that  our  houses  are  pro- 
perly cleaned  and  kept  comfortable  and  pleasant 
is  done  by  our  womenkind  for  nothing.  It  may 
be  said  that  in  return  we  support  our  wives 
or  sisters  or  whoever  it  may  be  that  does  this 
invaluable  work  for  us.  So  we  do  sometimes, 
but  by  no  means  always.  It  is  also  true  that 
they  usually  control  the  household  expenditure, 
but  that  does  not  mean  that  they  are  given 
definite  pay  for  their  work.  The  true  economic 
facts  of  the  matter  are  well  expressed  by  the 
story  of  the  thrifty  Scotch  widower  who  married 
his  housekeeper  to  save  her  wages. 

"  Merit/'  says  Mr.  Dibblee,  in  his  "  Laws 
of  Supply  and  Demand,"  "  is  a  subordinate  con- 
sideration in  fixing  the  scale   of  rewards   for 

*  "Problems  of  Village  Life,"  by  E.  N.  Bennett,  p.  i6o. 


54  POVERTY  AND  WASTE 

services,  although  very  few  successful  men 
would  like  to  think  so.'*  The  amount  of  men's 
wages  and  salaries  in  many  cases  seems  to  vary 
in  an  inverse  ratio  with  the  work  that  they 
do.  Who  is  there  that  knows  anything  of 
business  who  cannot  call  to  mind  examples  of 
a  figurehead  earning  the  salary  while  a  poorly 
paid  assistant  does  the  work  ?  There  is  a  very 
great  element  of  gamble  in  the  manner  in  which 
our  incomes  are  arranged.  If  a  well-paid  post 
is  empty,  those  who  have  to  see  to  the  choosing 
of  its  holder  very  often  do  not  advertise  or 
in  any  way  pubUsh  the  fact,  simply  because 
they  know  that  if  they  did  so  they  would  be 
swamped  by  a  flood  of  applications,  which 
would  have  to  be  considered  on  their  merits. 
Hence  they  usually  find,  or  think  they  find, 
the  man  they  want  by  means  of  private  inquiries. 
That  is,  if  they  or  any  of  their  friends  know  of 
some  one  that  is  likely  to  be  able  to  do  the  work, 
this  lucky  individual  gets  the  post,  and  so 
everybody  is  saved  a  great  deal  of  trouble.  But 
this  hole-and-corner  way  of  doing  things  makes 
success  in  life  very  largely  a  matter  of  luck. 
This  digression  goes  to  prove  that  when  we 


THE  CLAIMS  OF  CAPITAL  55 

decided  that  the  owner  of  inherited  capital 
ought  to  search  his  breast  and  ask  why  he  should 
be  so  spoilt  by  fortune,  and  whether  the  use 
that  he  makes  of  his  advantages  is  fair  to  the 
community  that  supports  him,  we  were  merely 
laying  down  a  rule  which  applies  to  practically 
every  one  who  has  or  earns  more  money  than 
the  very  poorest.  For  we  all,  except  them, 
owe  much  to  hereditary  gifts  ;  most  of  us  have 
to  thank  our  stars  for  many  a  kindly  Hft  from 
luck,  and  we  all  live,  more  or  less,  on  the  com- 
munity, since  if  we  were  cast  on  a  desert  island 
by  ourselves  it  would  take  us  a  long  time  and 
a  great  deal  of  labour  before  we  could  provide 
ourselves  with  half  the  comforts  that  we  now 
enjoy  as  a  reward  of  very  moderate  effort. 

To  return  to  the  capitalist  and  Walker's 
example  of  the  fishing  savage  who  saved  up 
food  and  lived  on  it  while  he  built  a  canoe. 
By  so  doing  the  fisher  was  several  other  things 
besides  a  capitalist.  He  was  an  adventurer  or 
risk-taker,  and  an  organizer  and  manager.  He 
thought  out  and  planned  the  whole  scheme  and 
risked  all  the  labour  involved  in  catching  more 
fish  than  he  wanted  to  eat  and  drying  them  and 

E 


56  POVERTY  AND  WASTE 

in  building  his  canoe  and  dragging  it  down  to 
the  sea.  His  risks  were  manifold.  He  was  in 
danger  of  being  devoured  by  wild  beasts  while 
in  the  forest  building  his  canoe.  His  canoe 
might  easily  have  been  fatally  damaged  on  its 
rough  journey,  and  when  it  had  been  brought 
to  the  sea  it  might  not  have  floated. 

All  these  additional  functions  that  the 
fisherman-inventor  was  performing  are  really 
quite  separate  from  capital,  and  have  to  be 
paid  for  separately.  This  fact  is  often  ignored 
by  people  who  talk  about  the  conflict  between 
capital  and  labour  as  if  these  two  were  the  only 
claimants  to  any  share  in  the  profits  of  an 
enterprise.  They  often  argue  that  the  claim 
of  capital  to  all  the  profit,  after  labour  has  been 
paid  a  wage  for  its  toil,  is  an  exorbitant  demand. 

Now,  the  pittance  that  is  paid  to  labour 
is  an  economic  evil  which  cries  aloud  for  a 
remedy,  but  we  shall  not  find  a  remedy  by 
mixing  things  together  that  are  really  quite 
separate  and  then  proposing  to  reward  only 
one  of  them.  The  reward  of  the  manager  or 
organizer  has  to  be  provided  apart  from  the 
interest  on  capital.     Moreover,  the  capitalist, 


THE  CLAIMS  OF  CAPITAL  57 

as  such,  is  a  mere  moneylender  or  investor. 
As  such  he  is  entitled  to  a  rate  of  interest  on 
his  money,  since  we  have  seen  that  if  there 
were  no  one  who  saved  and  lent  money  industry 
would  perish.  As  soon  as  the  investor  is  asked 
to  take  risks  and  become  more  or  less  a  specu- 
lator, he  is  entitled  to  an  addition  to  this  rate. 
In  other  words,  the  more  the  element  of  risk 
comes  into  an  investment,  the  more  the  rate 
of  interest  on  safely  invested  capital  has  to  be 
increased  by  what  is  really  an  inducement  to 
take  a  risk. 

For  example,  the  present  *  price  of  Consols, 
the  holder  of  which  is  as  certain  of  his  interest 
as  any  one  can  be  certain  of  anything  in  this 
world,  is  such  that  a  buyer  of  them  at  the 
current  quotation  gets  3f  per  cent,  on  his  money. 
The  present  price  of  Midland  Railway  Deferred 
Stock,  the  holder  of  which  has  to  run  the  risks 
of  trade  fluctuations,  labour  troubles  and  all 
the  other  ills  that  railway  shareholders  are  heir 
to,  is  such  that  a  buyer  of  it  gets  5|  per  cent, 
on  his  money.  The  additional  2  5  per  cent, 
is   the   inducement    to    the    more    speculative 

♦  March  20,  1914. 


58  POVERTY  AND  WASTE 

investor  to  run  these  risks.  This  truism  ought 
not  to  need  repeating.  But  a  pamphlet  about 
the  Coal  Trade,  one  of  the  authors  of  which  was 
a  chartered  accountant,  lately  assumed  3  per 
cent,  as  the  fair  rate  of  interest  on  capital 
invested  in  the  highly  speculative  business  of 
digging  coal  out  of  the  earth.  When  one  can 
get  more  than  3  per  cent,  from  Consols,  no  one 
but  a  madman  would  put  money  underground, 
with  the  chance  of  never  seeing  it  again, 
unless  he  thereby  expected  to  earn  at  least 
twice  as  much  as  he  could  get  from  an  invest- 
ment in  Consols. 

Since  an  element  of  risk  is  more  or  less 
present  in  nearly  all  the  forms  in  which  invest- 
ments are  made,  especially  in  industrial  ventures, 
the  double  payment  that  has  to  be  made  to 
the  capitahst,  not  only  for  lending  his  money^ 
but  for  risking  the  possibility  of  not  getting  it 
back  again,  is  an  item  that  always  has  to  be 
provided  for,  and  would  have  to  be,  under 
whatever  system  enterprise  were  organized. 
A  Socialistic  Government,  if  some  new  form  of 
enterprise  for  the  common  good  were  put  before 
it,  would  be  bound  to  hesitate  unless  it  could 


THE  CLAIMS  OF  CAPITAL  59 

be  convinced  that  the  new  experiment  was 
likely  to  be  successful.  In  other  words,  it 
would  have  to  be  tempted  by  a  strong  chance 
of  success  before  it  would  risk  the  community's 
capital  and  industry.  At  present  an  investor 
with  a  new  process  or  an  adventurer  with  a 
scheme  of  wonderful  promise,  can  appeal  to 
the  speculative  instinct  of  the  capitalist  and 
induce  him  to  risk  his  money  by  the  hope  of 
big  gains.  Under  a  communistic  Government 
the  inventor  or  adventurer  could  only  get  his  idea 
set  to  work  by  the  much  more  difficult  process 
of  convincing  officials,  who  would  almost  cer- 
tainly be,  after  the  manner  of  their  kind,  very 
deaf  to  his  arguments.  They  would  know  that 
if  they  set  the  community  to  work  on  a  task 
that  brought  it  no  return  the  community  would 
laugh  at  them,  abuse  them,  and  otherwise 
vent  its  displeasure  on  them.  The  obstacles 
in  the  face  of  a  new  enterprise  would,  in  fact, 
be  probably  even  greater  under  such  a  system 
than  they  are  now. 

Some  one,  then,  has  to  take  a  risk,  and  has 
to  be  paid  for  so  doing,  whenever  human  industry 
tucks  up  its  sleeves  to  work.     There  is  always  the 


6o  POVERTY  AND  WASTE 

chance,  when  it  is  a  matter  of  turning  out  raw 
material  by  agriculture  or  mining,  that  the 
seasons  may  be  unkind  or  that  some  unexpected 
fault  may  set  the  engineer's  calculations  at 
naught.  When  a  finished  product  is  the  busi- 
ness in  hand  there  is  the  chance  that  a  change 
in  the  weather,  or  a  change  in  fashion,  or  a 
change  in  the  whim  of  the  consumer,  may  leave 
the  stuff  on  the  hands  of  its  makers. 

Anything  that  can  be  done  to  lessen  these 
risks  is  a  gain  to  industry.  The  natural  risks 
that  have  to  be  faced  in  farming  and  mining 
can  only  be  dealt  with  by  the  progress  of 
science  and  the  accumulation  of  knowledge 
and  experience.  The  economic  risk,  on  the 
other  hand,  which  is  really  a  human  risk — the 
chance  that  the  stuff  which  is  made  may  not  be 
wanted, — can  be  lessened  very  much  if  industry 
could  give  more  of  its  attention  to  articles 
of  real  necessity  and  less  to  luxuries  that  can 
easily  be  dispensed  with,  and  if  at  the  same 
time  the  power  to  buy  articles  of  real  necessity 
could  be  got  into  the  hands  of  those  who  at 
present  have  to  do  without  them. 

It  is  difficult  to  draw  a  line  between  luxuries 


THE  CLAIMS  OF  CAPITAL  6i 

and  necessaries,  because  the  difference  is  often 
not  one  of  kind  but  of  number.  In  this  cHmate 
boots  are  a  necessity.  But  when  one  has  more 
than  three  or  four  pairs,  the  quantity  begins 
to  imply  hixury.  If  there  were  less  demand 
for  costly  boots  by  people  who  keep  more  than 
they  can  use,  and  may  suddenly  change  their 
minds  about  the  shape  of  their  toes,  or  the 
advantages  of  buttons  over  laces,  the  attention 
of  the  bootmaking  industry  would  be  turned 
towards  a  greater  output  of  cheap  boots  for 
classes  which  are  less  susceptible  to  the  whims 
of  fashion. 

There  is  evidently  a  screw  loose  somewhere 
in  an  economic  machine  the  result  of  whose 
working  is,  that  there  can  be  a  glut  of  boots 
in  one  street,  while  in  the  next  there  are  folk 
walking  about  on  wet  pavements  with  ghosts 
of  old  boots  and  shoes  on  their  feet.  It  is  bad 
for  the  bootmaker,  bad  for  those  who  want  boots 
and  cannot  buy  them,  and  bad  for  the  com- 
munity which  has  finally  to  pay  for  the  economic 
inefficiency  of  some  of  its  members,  due  to 
chronically  damp  feet  and  all  the  ills  that  arise 
therefrom. 


62  POVERTY  AND  WASTE 

Hence  it  follows  that  if  the  reform  set  forth 
in  our  second  chapter  could  be  brought  about, 
and  the  two  simultaneous  consequences  of  it 
set  to  work,  namely  the  diversion  of  industry 
from  luxuries  to  necessities,  and  the  increase 
in  the  amount  of  available  capital  and  so  in 
the  demand  for  labour,  the  risk  of  industry 
would  be  very  greatly  lessened.  Because  the 
man  who  was  ma.king  boots  would  be  sure  of  a 
market  as  long  as  there  were  people  who  needed 
them  and  could  afford  to  pay  for  them.  The 
more  the  buying  power  of  the  poor  could  be 
increased,  the  greater  would  be  the  stability 
of  industry  and  the  less  would  be  the  rate  that 
would  have  to  be  paid  to  capital  for  risking 
itself  as  well  as  lending  itself. 

Nevertheless,  there  still  remains  a  very  big 
difficulty  which  has  to  be  faced  before  capital 
can  be  made  really  comfortable  and  can  be 
persuaded  to  place  itself  on  terms  which  pay 
it  only  for  its  use  and  not  for  the  risk  that  it 
may  be  lost.  It  is  not  enough  to  lessen,  or 
even  abolish,  the  risks  which  are  at  present 
due  to  the  speculative  nature  of  industry  which 
provides   luxuries   for   fanciful   folk   who   may 


THE  CLAIMS  OF  CAPITAL  63 

or  may  not  want  them.  There  is  also  the 
terrible  risk,  that  is  always  in  the  mind  of  the 
capitalist,  of  loss  owing  to  strikes  and  other 
dislocations  of  industry  caused  by  labour  dis- 
putes. It  is  not  enough  to  increase  the  supply 
of  capital  by  the  reduction  of  expenditure  on 
luxuries  if  capital  is  afraid  to  embark  in  enter- 
prise owing  to  strained  relations  with  labour. 
This  formidable  problem  properly  comes  under 
another  heading,  being  concerned  rather  with 
the  relations  between  employers  and  their 
workmen,  and  so  may  be  reserved  for  another 
chapter. 

In  this  one  it  is  enough  to  have  shown  that 
capital  is  a  first  necessity  of  industry  and  has 
to  be  paid  for  as  such  :  that  not  only  its  use 
has  to  be  paid  for,  but  also  the  risk  of  its  loss, 
which  can  be  lessened  by  the  concentration  of 
industry  on  articles  of  necessity  which  are 
clearly  more  certain  of  a  market  than  luxuries  ; 
and  that  a  greater  abundance  of  capital,  by 
quickening  industry,  would  tend  to  lessen  the 
risk  of  labour  disturbance  by  increasing  the 
demand  for  labour,  and  so  improving  its  reward. 
Further,  that  if  we  are  right  in  contending  that 


64  POVERTY  AND  WASTE 

the  concentration  of  industry  on  articles  of 
necessity  would  help  to  cheapen  them,  this  would 
be  a  further  advantage  to  the  working  classes 
and  help  them  to  win  that  improvement  in  their 
lot  to  which  they  are  by  general  consent  entitled. 
If  all  this  be  granted  we  can  at  least  claim  to 
have  shown  a  way  by  which  every  individual 
can  do  something  to  solve  the  big  problem  of 
doing  away  with  poverty,  by  lessening  expendi- 
ture on  luxuries  and  adding  to  the  stock  of 
available  capital. 

In  this  matter  of  capital  the  individual 
seems  to  be  the  only  possible  saviour  of  the 
situation,  because  Governments  all  over  the 
world  are  doing  their  best  to  seize  as  much 
wealth  as  they  can  and  consume  it  as  fast  as 
possible.  Enormous  expenditure  on  objects 
good  and  bad  is  everywhere  the  order  of  the  day. 
Chancellors  of  the  Exchequer  or  Finance 
Ministers,  or  whatever  they  may  be  called,  pat 
themselves  on  their  right  honourable  backs 
because  they  spend  these  huge  sums  out  of 
revenue  as  they  call  it,  that  is  to  say  because 
they  do  not  borrow  the  money  and  leave 
posterity  to  pay  the  bill,  but  make  their  fellow 


THE  CLAIMS  OF  CAPITAL  65 

citizens  pay,  here  and  now.  Certainly  it  is 
better  to  pay  our  way  as  we  go,  but  we  must  not 
forget  that  our  huge  rate  of  national  expenditure 
makes  it  very  difficult  for  the  necessary  accumu- 
lation of  capital  for  industry  to  be  maintained, 
because  it  makes  it  hard  for  the  thriftiest  of 
us  to  save. 

Scarcity  and  dearness  of  capital  are  a 
commonplace  complaint  whenever  men  of  busi- 
ness are  gathered  together.  At  a  meeting  of  the 
Union  of  London  and  Smiths  Bank  last  July, 
Sir  Felix  Schuster  said  that  *'  owing  to  the  con- 
tinuous growth  of  trade  and  of  new  countries,  the 
demands  for  capital  had  been  on  an  enormous 
scale.  Until  the  end  of  the  half-year  these 
fresh  issues  of  capital  were  comparatively  well 
taken  up  by  the  public,  but  then  it  became 
manifest  that  the  supply  exceeded  the  demand, 
and  the  Stock  Exchanges  were  no  longer  able 
to  absorb  the  multitude  of  new  issues  that  were 
'being  offered."  *  This  inabiUty  of  investors 
to  meet  the  demands  on  their  power  to  absorb 
new  issues  of  securities  has  been  a  frequently 
recurring  symptom  in  recent  years.     The  price 

♦  Reported  ic  the  Tinas  of  July  24,  1913, 


66  POVERTY  AND  WASTE 

of  capital,  or  the  rate  of  interest  that  investors 
have  been  able  to  obtain,  has  risen  gradually 
and  steadily  from  1896  until,  the  end  of  last 
year.  In  1896  London  and  North  Western 
4  per  cent.  Preference  Stock  touched  162I, 
at  which  price  it  returned  less  than  2|  per  cent, 
to  the  buyer.  In  1913  the  same  security  was 
dealt  in  at  97 1,  yielding  the  buj^er  more  than 
4  per  cent. 

It  is  true  that  1896  was  an  exceptional  year, 
in  which  there  was,  or  seemed  to  be,  a  glut  of 
capital  such  as  had  never  been  seen  before. 
This,  I  believe,  only  happened  because,  owing 
to  the  shock  to  confidence  following  the  crises 
of  1890  and  1893,  there  was  a  long  pause  in 
the  development  of  new  countries,  and  for  a 
time  accumulation  went  ahead  of  development. 
It  may  be  that,  owing  to  the  shock  to  confidence 
due  to  Mexico's  default  and  mistrust  of  the 
financial  position  of  certain  South  American 
states,  a  similar  pause  in  the  development  of 
new  countries  may  take  place  now  and  that  there 
may  for  a  time  be  an  apparent  glut  of  capital. 
But  it  seems  hardly  likely,  when  we  consider 
the   enormous   demands  of   the   civilized   and 


THE  CLAIMS  OF  CAPITAL  67 

uncivilized  world  for  capital,  that  the  seeming 
glut  can  last  long,  and,  if  it  does,  it  will  only 
do  so  because  capital  cannot  be  had  at  any  price 
by  borrowers  whose  credit  is  impaired,  not 
because  it  is  not  wanted.  The  normal  con- 
dition of  the  financial  world  is  now  one  in 
which  capital  is  scarce  and  dear. 

Four  chief  causes  of  this  scarcity  and 
dearness  of  capital  stand  out.  One  is  its 
wholesale  destruction  by  wars.  The  second  is 
the  opening  up  of  the  uttermost  parts  of  the 
earth  to  cultivation  and  development  by  im- 
proved means  of  communication,  which  increases 
the  world-wide  demand  for  capital  to  be  put 
into  production,  which  takes  some  years  to 
bear  fruit  on  a  great  scale.  The  third  is  the 
huge  expenditure  of  the  nations,  especially 
on  armaments  and  preparations  for  war.  The 
high  taxation  that  is  now  exacted  by  our 
rulers  has  httle  or  no  effect  on  the  personal 
comfort  of  the  wealthier  classes,  but  it  very 
seriously  curtails  their  saving  power.  The  fourth 
is  the  high  level  of  personal  expenditure  and 
extravagance  that  modern  fashion  prescribes. 
The  sums  that  many  women  now  spend  on 


68  POVERTY  AND  WASTE 

adorning  themselves  are  acknowledged  by  most 
sensible  women  to  be  criminal.  Entertainment 
is  on  a  scale  that  smothers  hospitality  under  a 
tawdry  show  of  ostentation.  And  this  osten- 
tation— perhaps  owing  to  the  efforts  of  a  Press 
that  gives  much  of  its  space  to  telling  the 
suburbs  what  the  leaders  of  society  are  doing 
— ^has  spread  itself  all  the  way  down  the  various 
strata  of  the  middle  class,  which  used  to  dis- 
tinguish the  comforts  of  life  from  its  fripperies 
with  some  success.  There  is  no  need  to  preach 
sermons  about  this  outburst  of  spendthrift 
enthusiasm  and  argue  that  the  moral  fibre  of 
society  is  weakened.  It  merely  arises  from  a 
very  natural  desire  to  enjoy  some  diversion  in 
a  world  of  strenuous  energy.  But  those  who 
fall  a  prey  to  it  forget,  to  their  own  discomfort, 
that  diversion  can  be  had  without  vulgar 
extravagance,  and  also  forget,  to  the  detriment 
of  their  poorer  neighbours,  that  expenditure 
on  luxuries  makes  the  struggle  of  the  poor  more 
difficult. 


CHAPTER  IV 

THE   employer's   DILEMMA 

We  saw  that  the  fishing  savage  who  became  a 
capitahst  thereupon  also  became  an  employer, 
since  he  sold  the  canoes  that  he  built  in  return 
for  the  labour  of  his  neighbours.  This  union 
of  the  capitalist  and  the  employer  in  one  person 
was  for  many  centuries  usual.  In  these  days 
it  is  more  and  more  usual  for  industry  to  be 
carried  on  under  the  joint-stock  system,  that  is 
to  say,  by  companies  composed  of  a  more  or  less 
large  body  of  shareholders,  managed  on  their 
behalf  by  salaried  officials,  under  the  super- 
vision of  a  committee  of  the  shareholders  who 
are  called  the  Board  of  Directors.  The  Board 
is  supposed  to  be  elected  by  the  shareholders, 
but  in  fact  it  almost  always  elects  itself.  If  a 
member  of  it  dies  or  resigns  his  successor  is 
chosen  by  the  Board,  subject  to  the  purely  formal 


70  POVERTY  AND  WASTE 

confirmation  of  the  shareholders.  Members  of 
the  Board  retire  periodically  by  rotation,  but 
their  re-election  is,  as  a  rule,  a  mere  ceremony 
that  is  gone  through  without  question.  The 
real  management  of  most  successful  businesses 
is  usually  in  the  hands  of  the  salaried  officials, 
headed  by  the  general  manager — who  is  some- 
times also  a  director,  and  called  the- managing 
director— though  the  Chairman  of  the  Board 
and  one  or  two  of  its  more  energetic  and  capable 
members  sometimes  take  an  active  part  in  the 
conduct  of  the  industry. 

This  comparatively  modern  development,  by 
which  industry  is  worked  by  officials  on  behalf 
of  a  body  of  shareholders,  is  of  some  importance 
in  its  relation  to  the  great  problem  of  the  im- 
provement of  the  reward  of  labour.  When  the 
employer  put  his  own  capital  into  a  business 
and  managed  it  himself  f(5r  his  own  profit,  the 
promptings  of  humanity  and  of  good-fellowship 
between  himself  and  his  hands  might  allow  him 
to  be  generous  in  the  matter  of  wages,  and  often 
did  so.  He  had  a  perfect  right,  if  he  pleased, 
to  share  some  of  his  profits  in  good  treatment  of 
those  who  helped  him  to  earn  it  with  their  labour. 


THE  EMPLOYER'S  DILEMMA        71 

The  officials  of  a  company,  on  the  other  hand, 
being  servants  of  the  shareholders  whose  money 
is  put  into  their  hands  for  profitable  employ- 
ment, are  bound  to  consider  the  interests  of 
the  shareholders  and  to  earn  profits  for  them 
as  fast  as  they  can.  If  they  pay  higher  wages 
than  are  necessary  for  getting  the  work  done, 
they  are  being  generous  at  the  expense  of  the 
shareholders  on  whose  behalf  they  are  working. 
The  consequence  is  that  those  who  work  for  the 
comparatively  few  surviving  private  firms  are 
usually  said  to  be  better  paid  and  treated  than 
those  who  work  for  big  public  companies. 

Striking  examples  to  the  contrary,  such  as 
the  treatment  of  their  workmen  by  Messrs. 
Lever,  are  not,  when  examined,  examples  to  the 
contrary  at  all,  for  though  Lever  Brothers, 
Limited,  is  apparently  a  joint-stock  company, 
it  is  only  so  in  form,  since  thp  ordinary  capital 
has  never  been  offered  for  pubHc  subscription. 
The  pubHc  shareholders  only  hold  preference 
shares  entitled  to  a  fixed  rate  of  dividend. 
When  that  has  been  paid  the  surplus  profit 
belongs  to  the  founders  of  the  business  who  have 
themselves  supplied  the  ordinary  capital,   and 

V 


73  POVERTY  AND  WASTE 

so  have  been  fully  entitled  to  make  any  use  of 
it  that  they  pleased  in  the  interest  of  the  workers. 
Profit-sharing  schemes,  under  which  the  work- 
men are  encouraged  to  invest  in  the  stock  or 
shares  of  the  company,  have  been  successfully 
worked  by  public  joint  stock  companies,  notably 
by  the  South  Metropolitan  Gas  Company.  But 
these  have  been  few  and  far  between,  and  the 
experiment  has  shown  little  sign  of  making 
headway  against  the  great  obstacles  that  stand 
in  its  way. 

This  difficulty  that  haunts  the  joint  stock 
company's  manager— arising  from  the  fact  that 
it  is  his  first  business  to  make  profits  for  the 
shareholders  for  whom  he  works  and  by  whom 
he  is  paid — is  accompanied  by  yet  another  that 
besets  all  employers  as  such,  arising  from  the 
necessity  that  if  they  are  to  make  their  businesses 
y  pay,  they  must  turn  out  their  product,  what- 
ever it  may  be,  as  cheaply  as  they  can.  If  they 
do  not  do  so  they  are  likely  to  be  swamped  by 
the  flood  of  competition  and  go  under,  and  then 
the  last  state  of  those  who  work  for  them  is 
worse  than  the  first. 

It  is  easy  to  say  airily  that  it  were  better 


THE  EMPLOYER'S  DILEMMA       73 

that  those  industries  that  can  only  survive  by 
underpaying  their  workers  should  be  cast  out 
upon  the  scrap  heap ;  but  the  retort  is  equally 
■easy,  and  perhaps  equally  unsatisfactory,  that 
underpay  is  better  than  no  pay. 

Further,  even  if  some  scheme  could  be 
devised  and  made  universal  by  which  every 
employer  or  joint -stock  company,  after  a 
certain  rate  of  profit  or  dividend  had  been 
earned,  would  promise  to  divide  any  surplus 
profit  between  the  employer  or  shareholders  on 
the  one  hand  and  the  workers  on  the  other 
would  industrial  peace  and  contentment  be 
secured  ? 

In  the  first  place,  the  profit  could  only  be 
earned  after  a  certain  wage  had  been  paid  to 
the  workers,  and  the  amount  of  this  wage 
would  inevitably  remain  a  matter  for  hvely 
dispute.  In  the  second,  there  would  be  equally 
wide  openings  for  difference  of  opinion  about 
the  ratio  in  which  the  surplus  profit  if  any  should 
be  divided  between  workers  and  shareholders. 
And  finally,  it  would  seem  very  unfair  that  the 
wages  of  the  workers,  or  at  least  their  share  of 
surplus  profit,  should  depend  very  largely  on 


74  POVERTY  AND  WASTE 

conditions  with  which  they  had  nothing  to  do. 
However  capable  and  efficient  a  worker  might 
be,  he  might  find  himself  earning  very  much 
less  than  his  brother,  who  was  working  in  a 
rival  factory  in  the  next  street,  because  the 
management  under  which  his  brother  happened 
to  work  was  more  economical  and  enter- 
prising, had  its  machinery  in  better  condition 
and  its  whole  organization  better  equipped. 
A  state  of  things  might  thus  arise  which  would 
be  very  bad  for  the  peaceful  working  of 
industry. 

For  success  in  an  industry  in  these  days 
depends  much  more  on  good  management  and 
good  organization  and  skill  in  the  purchase  of 
raw  material  and  judgment  in  the  sale  of  the 
finished  product  than  on  the  efficiency  of  the 
workers,  important  though  this  still  is.  This  is 
a  fact  that  is  often  forgotten  by  those  who  are 
somewhat  hasty  in  their  claims  on  behalf  of 
labour.  It  does  not  help  the  cause  of  labour 
to  tell  it  that  it  ought  to  have  more  than  there 
is  for  it,  and  to  assume  that  because  a  certain 
number  of  men  have  worked  for  a  given 
number  of  hours  on  a  certain  task,  therefore 


THE  EMPLOYER'S  DILEMMA        75 

the  finished  product  must  be  worth  so  many 
pounds,  and  therefore  labour  is  entitled  to  that 
amount,  less  interest  on  capital. 

The  world  would  be  a  much  easier  and 
pleasanter  place  to  live  in  if  these  things  were 
true,  but  they  are  quite  untrue.  It  is  not 
enough  to  work  on  a  thing  to  give  it  value. 
You  have  to  work  on  it  in  such  a  way  that  when 
it  is  made  somebody  will  want  it  and  pay 
enough  for  it  to  cover  the  cost  of  making  it, 
and  something  over.  Workmanship  and  design 
may  be  as  good  as  can  be,  but  if  the  product 
is  not  wanted  it  will  be  a  failure.  The  men  who 
wrought  on  the  Great  Eastern,  **  Brunei's  great 
audacity,"  as  she  was  called,  were  quite  as  good 
men  and  skilful,  in  their  day,  as  those  who  built 
the  Mauretania.  But  if  they  had  depended  for 
their  wages  on  the  truth  of  the  theory  that  work 
alone  makes  value,  and  that  because  so  much 
work  had  been  put  into  the  Great  Eastern,  there- 
fore she  was  worth  so  many  pounds,  they  would 
have  starved.  She  "  stood  out  unapproached 
as  a  wonder  and  pattern  of  naval  construction, 
and  furnished  in  great  measure  the  experience 
on  which  later  designers  and  constructors  have 


76  POVERTY  AND  WASTE 

based  their  productions."  •  Her  only  fault  was 
that  she  was  ahead  of  her  age,  but  that  was 
enough  to  make  her,  commercially,  a  lamentable 
failure.  Management  had  made  a  mistake  and 
the  result  was  a  product  that  was  worthless, 
though  the  actual  labour  put  into  it  may  have 
been  of  the  very  best. 

Such  being  the  importance  of  management, 
it  is  natural  enough  that  those  employers  who 
do  their  own  management  should  consider  that 
they  are  thereby  entitled  to  any  surplus  profit 
that  is  over  after  they  have  paid  their  workmen 
what  is  called  a  market  rate  of  wages  ;  and  that 
public  companies  should  vie  with  one  another 
in  the  high  salaries  that  they  pay  to  their 
managers  and  managing  staff,  while  the  claims 
of  the  hand-workers  are  listened  to  with  much 
less  enthusiasm.  For  if  a  good  manager  is 
lost  it  is  very  hard  to  replace  him,  but  the 
difference  between  one  workman  and  another 
is  of  much  less  moment  to  the  company  for 
which  he  toils. 

Moreover,  a  shareholder  in  a  company  that 
is  called  upon  to  pay  its  workmen  more  than  is 

•  D.  Pollock.  "  The  Shipbuilding  Industry,"  p.  49. 


THE  EMPLOYER'S  DILEMMA       ^^ 

necessary  to  attract  them  to  come  and  work, 
is  entitled  to  ask  why  he  should  consent  to  such 
a  policy,  and  to  point  out  that  the  workman 
is  in  the  privileged  position  of  being  paid  for 
his  work  before  a  penny  is  paid  in  the  way  of 
interest  or  dividend  on  the  capital  sunk  in  the 
business.  Even  if  the  enterprise  is  carried  on 
at  a  loss  the  workmen  will  be  paid  none  the  less, 
while  the  shareholders  who  have  risked  their 
savings  in  it  have  to  watch  their  capital  being 
consumed  to  no  purpose,  and  probably  throw 
good  money  after  bad  in  the  effort  to  brings  the 
carcase  back  to  life. 

This  argument  is  quite  logical  and  reason- 
able, and,  moreover,  the  workers  are  not  asking 
for  generosity,  which  is  only  another  form  of 
charity.  The  market  rate  is  all  that  they  want, 
but  they  are  determined  to  do  all  that  they  can 
to  make  that  market  rate  higher.  In  order 
to  see  whether  they  can  do  so  effectively,  we 
have  first  to  see  clearly  the  point  of  view  of  the 
employer  and  of  the  people  on  whose  behalf 
he  is  working.  And  we  have  also  to  take  care 
not  to  be  misled  by  some  of  the  fallacies  that 
are  uttered,  in  the  best  of  good  faith,  by  folk 


78  POVERTY  AND  WASTE 

whose  enthusiasm  in  the  cause  of  labour  leads 
them  into  misconceptions.  Such  as  the  con- 
tention that  because  employers  are  very  careful 
to  maintain  the  efficiency  of  their  plant  and 
machinery,  they  are  bound  to  be  equally  earnest 
about  the  health  and  general  well-being  of 
their  human  workers,  who,  being  human,  have 
clearly  more  claim  on  them  than  driving  wheels 
and  steam  hammers.  This  is  a  very  attractive 
argument  at  first  sight,  but  it  forgets  that  the 
machinery  is  the  property  of  the  company, 
whereas  the  workman  can  move  his  labour 
to  some  better  opening  whenever  it  pleases 
him  ;  also  the  still  more  important  fact,  from 
the  worker's  point  of  view,  that  this  argument 
is  a  two-edged  weapon  that  wounds  the  hand 
that  wields  it ;  for  in  these  days  of  rapid 
improvement  machinery  is  often  treated  in  a 
most  unceremonious  fashion,  and  is  thrown  out 
on  to  the  scrap  heap  at  the  moment  of  its 
highest  efficiency,  when  it  still  has  years  of 
good  work  before  it,  merely  because  some  more 
ingenious  and  economical  rival  has  been  found. 

Nevertheless,  when  all  this  is  admitted  and 
the  fullest  acknowledgment  has  been  made  of 


THE  EMPLOYER'S  DILEMMA       79 

the  logical  strength  of  the  employer's  position 
when  he  tries  to  get  his  work  done  as  cheaply 
as  he  can,  there  remains  the  uncomfortable 
feeling  that  logic  does  not  always  tell  us  every- 
thing. The  employer  may  be  right,  when 
he  says  that  he  offers  a  certain  wage  and  finds 
hundreds  of  men  and  women  to  work  for  him, 
and  that  this  is  to  him  a  good  enough  proof 
that  this  wage  is  a  fair  one.  But  this  argument 
is  based  on  the  assumption  that  the  workers 
who  take  a  low  wage  have  any  choice  in  the 
matter,  and  this  we  know  to  be  often  untrue. 
He  is  on  safer  ground  when  he  contends  that 
if  he  were  compelled  to  pay  more  he  could  only 
afford  to  keep  his  most  efficient  workers,  and 
so  many  would  be  thrown  out  of  work ;  and 
that  at  a  point  he  would  have  to  shut  up  his 
business  altogether,  unless,  on  the  other  hand, 
he  were  able  to  raise  the  price  of  his  product 
and  so  make  the  struggle  of  the  poor  still  harder „ 
by  the  rise  in  prices,  if  his  product  is  one  of 
the  things  that  they  buy. 

Here  we  have  to  admit  that  logic  is  on  his 
side,  but  we  remain  with  the  conviction  that 
somehow  the  flank  of  the  problem  has  to  be 


8o  POVERTY  AND  WASTE 

turned.  If  the  employer  cannot  afford  to 
raise  wages,  somebody  else  must  help  him  to 
do  so.  It  was  a  shock  to  public  opinion  when 
it  lately  learnt,  on  the  authority  of  a  Board 
of  Trade  inquiry,  that  in  1907  "  for  the  United 
Kingdom,  as  a  whole,  the  weekly  rate  of  wages 
(exclusive  of  bonus  if  any)  of  over  one-fourth 
of  the  adult  workmen  [of  the  railway  companies] 
fell  below  20s.,  and  those  of  nearly  two-thirds 
below  25s.,  while  rather  less  than  a  fifth  were 
rated  at  30s.  or  more."  * 

The  employer's  position  was  in  this  case  a 
remarkably  strong  one.  The  profit  earned  bj^ 
the  railways  on  the  total  capital  invested  in 
them  is  meagre  enough,  when  allowance  is  made 
for  the  risks  of  the  industry  that  they  conduct. 
Their  public  was  ever  clamouring  for  more 
trains,  cheaper  tickets,  and  lower  rates  for  goods, 
and  in  this  sea-girt  land  they  are  much  more 
open  to  attack  by  marine  competition  than  the 
railways  of  the  Continent  and  America.  Public 
opinion,  however,  was  against  them,  and  thought 
that  the  men  ought  to  have  more.  It  is  said 
that  the  railway  managers  wanted  to  fight  the 

»  Cd.  6053. 


THE  EMPLOYER'S  DILEMMA       8i 

question  out  with  their  workers,  but  that  they 
were  over-ruled  by  the  Government,  and 
appeased  by  a  sop  in  the  shape  of  a  promise 
of  higher  rates  for  goods.  Since  then  travelHng 
faciUties  have  not  been  quite  so  lavishly  and 
cheaply  supphed,  and  the  public  has  paid  for 
its  sympathy  with  the  men,  as  was  right  and 
reasonable. 

It  is  clear  enough,  then,  that  the  employer 
is  in  a  very  difficult  quandary,  with  the  claims 
of  shareholders,  workers,  and  consumers  all 
twisting  ingenious  levers  that  give  uncom- 
fortably unanimous  pulls  at  the  rack  on  which 
he  is  stretched.  Then  he  is  often  accused  of 
being  a  heartless  sweater  and  an  exploiter  of 
his  workers,  because  he  tries  to  do  his  best  for 
the  people  who  have  sunk  money  in  the  industry 
that  he  manages. 

There  are  plenty  of  bad  employers.  There 
are  many,  especially  in  small  trades,  requiring 
small  capitals  and  carried  on  by  small,  mean 
men,  who  sweat  ignorant  workers  who  do  not 
know  what  they  ought  to  get  for  their  work. 
With  these  the  Trade  Boards  Act  is  gradually 
deaUng.     But  on  the  whole  the  position  of  the 


y 


82  POVERTY  AND  WASTE 

employer  is  one  that  wins  sympathy  from  those 
who  view  it  with  an  open  mind.  He  does  his 
work  according  to  the  best  of  his  Hghts,  under 
the  conditions  in  which  he  has  learnt  it,  and 
his  difficulties  are  very  great.  From  the  point 
of  view  of  his  shareholders  who  want  big 
dividends,  and  of  his  customers  who  want  cheap 
goods,  he  has  no  right  to  make  concessions  to 
his  workmen  unless  they  are  forced  on  him. 
What  we  have  to  do  for  him  is  to  help  him  by 
making  it  easier  for  the  workers  to  force  these 
concessions  from  him.  It  is  to  the  interest  of 
everybody  that  we  should  do  so. 

There  is  no  need  to  prove  that  it  is  to  the 
interest  of  the  workers  that  they  should  be 
helped  to  get  more  wages. 

That  it  is  to  the  interest  of  the  public  as 
a  whole  also  goes  without  saying.  If  labour 
were  better  paid,  strikes  and  disputes  would  be 
fewer,  and  we  should  all  feel  more  comfortable. 
Further,  it  cannot  be  good  for  any  nation  to 
have  a  large  and  very  important  part  of  it 
under-fed,  ill-clad,  and  ill-housed. 

It  is  also  clearly  to  the  interest  of  the 
employer,  whose  life  would  be  very  much  easier 


THE  EMPLOYER'S  DILEMMA       83 

if  it  were  not  clouded  by  the  chronic  fear  of 
labour  disputes.  If  he  could  satisfy  his  work- 
men without  impoverishing  his  shareholders 
he  would  be  ready  enough  to  do  so. 

It  would  also  be  in  the  interests  of  the  share- 
holders, or  of  the  private  employer  who  works 
with  his  own  capital,  though  it  is  rather  difficult 
to  make  them  see  it.  It  soon  becomes  clear, 
however,  if  we  put  it  in  this  way.  It  is  to  the 
interest  of  all  shareholders — or  whoever  it  may 
be  that  takes  the  surplus  profit  of  an  industry 
— that  the  workers  of  all  other  industries  but 
their  own  should  be  better  paid,  because  thereby 
an  enormous  body  of  people  with  money  to 
spend  would  be  given  more  money  to  spend, 
and  so  there  would  be  a  keener  demand  for  all 
kinds  of  goods,  including  the  goods  of  the 
industry  in  which  any  particular  body  of  share- 
holders is  interested.  Hence  it  follows  that 
since  it  is  to  the  interest  of  shareholders  that 
everybody  else's  workers  should  be  better  paid, 
it  would  also  be  to  their  interest  that  their 
own  should  be  better  paid,  as  long  as  everybody 
else's  were  at  the  same  time  better  paid  to 
at  least  the  same  extent.    For  the  slice  taken 


84  POVERTY  AND  WASTE 

out  of  their  profits  would  be  more  than  made 
up  by  the  bigger  turnover  and  bigger  profit 
to  be  got  owing  to  the  wider  and  keener  demand 
by  a  large  body  of  better  paid  workers  for  the 
stuff  that  their  company  is  turning  out.  If 
once  shareholders  could  all  be  convinced  of 
this  elementary  fact,  the  way  to  a  general 
rise  in  wages  would  be  made  straighter,  though 
the  very  serious  dijSiculty  would  still  remain 
that  the  rise  would  have  to  be  universal,  and 
every  company  or  firm  would  naturally  wait 
for  the  others  to  begin.  The  push  would  have 
to  come  from  below,  from  the  workers  them- 
selves, and  it  would  have  to  be  made  with  a 
great  heave  all  along  the  line. 

'*  Besides  which,"  says  a  shareholder  in  a 
company  with  a  special  and  select  kind  of 
business^  "  you  have  forgotten  companies  hke 
mine.  We  deal  in  pearl  necklaces  for  duchesses 
or  choice  champagnes  for  plutocrats.  A  general 
rise  in  wages  would  not  increase  our  turnover. 
Our  patrons  are  the  elect  few." 

This  is  true ;  but  on  the  other  hand,  in  these 
select  kinds  of  business  the  cost  of  labour  is 
a  scarcely  appreciable  item  in  their  expenses. 


THE  EMPLOYER'S  DILEMMA       85 

Their  product  depends  on  skill  in  selection 
and  taste  and  ingenuity  in  preparation.  It 
is  only  articles  of  more  or  less  universal  use  that 
would  be  in  greater  demand  through  an  increase 
in  the  wages  of  the  workers.  And  so  at  the 
end  of  this  examination  of  the  difficult  position 
of  the  employer,  we  find  that  it  also  would  be 
eased  if  that  change  of  mind  about  private 
expenditure  set  forth  in  Chapter  II  could  be 
brought  about.  We  have  walked  round  the 
circle  again  and  come  back  once  more  to  the 
starting-point.  A  rise  in  wages  can  only  benefit 
industry  as  a  whole,  if  industry  as  a  whole, 
instead  of  devoting  much  of  its  energy  and 
ingenuity  to  turning  out  fripperies,  gives  itself 
whole-heartedly  to  producing  necessaries  that 
will  find  a  freer  market  because  of  the  rise  in 
the  wages  of  the  workers.  And  this  can  only 
happen  if  those  who  influence  industry  by  buying 
goods,  cease  or  diminish  their  expenditure  on 
luxuries  because  they  recognize  that  every  time 
they  buy  luxuries  they  stiffen  the  price  of 
necessaries  and  make  the  struggle  of  the  poor 
still  harder. 


CHAPTER  V 

THE  WORKERS 

It  is  astonishing  that  there  should  be  any 
need  to  ask  for  a  fair  hearing  for  the  case 
of  the  workers.  By  the  workers  I  mean  the 
folk  who  do  more  or  less  mechanical  work, 
chiefly  with  their  hands,  and  are  usually  paid 
by  pence  per  hour  or  shillings  per  week.  For 
the  capitalist  and  the  employer  to  be  misunder- 
stood and  abused  for  no  reason  is  a  thing  that 
seems  to  happen  naturally.  It  is  difficult  for 
people  who  have  not  been  trained  to  think 
about  these  things  to  understand  that  those  who 
lend  their  money  to  enterprise  and  risk  their 
money  in  enterprise  must  be  paid  for  so  doing ; 
and  in  judging  the  action  of  the  employer  it 
is  easy  to  forget  that  when  he  is  a  manager  he 
has  to  earn  dividends  for  his  shareholders,  and 
when  he  works  for  his  own  hand  he  has  to  keep 
his  head  above  water.     But  it  is  almost  incredible 


THE   WORKERS  87 

that  at  this  stage  of  our  alleged  civiHzation 
any  one  should  doubt  that  labour  ought  to, 
and  must,  have  a  bigger  share  of  the  good  things 
of  the  world.  The  mere  fact  that  the  wonderful 
growth  of  material  prosperity,  of  which  we 
are  all  so  proud,  has  left  millions  of  people,  who 
do  the  hardest,  dreariest,  and  dirtiest  of  the 
work  that  has  produced  it,  to  live  under  condi- 
tions in  which  they  have  little  chance  of  really 
living  at  all,  ought  to  be  enough.  There  should 
be  no  need  to  contend  that  this  state  of  affairs 
ought  to  be  improved  off  the  face  of  the  earth. 
Everybody  ought  to  be  only  asking  how  to 
do  it  best  and  quickest. 

To  say  nothing  of  the  tragedy  of  the  matter, 
it  is  ridiculously  absurd  that,  in  a  world  wliich 
every  year  gives  us  a  greater  harvest  of  wealth, 
bad  food,  bad  clothes,  and  bad  houses,  should 
be  the  lot  of  the  majority  of  those  who  do  the 
hardest  and  least  pleasant  work,  while  anything 
like  refinement  and  culture  can  only  be  achieved 
by  them  through  almost  incredible  self-sacrifice. 
And  yet  it  has  only  lately  dawned  on  a  few 
eccentric  folk  that  poverty  is  a  thing  that  ought 
to  be,  and  can  be,  aboHshed. 


88  POVERTY  AND  WASTE 

It  is  true  that  this  new  and  audacious  heresy 
has  many  sympathizers,  and  has  even  made 
converts  where  it  might  least  have  expected 
to  succeed.  But  there  is  still  a  dreadful  dead- 
weight of  blear-eyed  opinion  that  believes  that 
poverty  among  the  workers  is  inevitable.  It 
often  expresses  much  theoretical  sympathy 
with  the  workers  on  account  of  their  supposedly 
unavoidable  poverty,  but  is  very  angry  with 
them  if  they  strike  or  demand  higher  wages. 
It  resents  any  attempt  to  better  the  lot  of 
those  without  whose  efforts  none  of  us  could 
enjoy  the  comforts  and  luxuries  on  which  we 
batten  and  fatten.  This  state  of  mind  generally 
arises  from  a  certain  lack  of  imagination.  It 
takes  a  certain  effort  to  put  one's  self  in  the  place 
of  the  workers,  and  to  try  to  see  how  the  world 
and  its  business  arrangements  must  look  to 
them.  But  if  we  make  this  effort  we  are  more 
likely  to  marvel  at  their  patience  than  to  resent 
their  desire  to  improve  their  position. 

It  was  lately  my  lot  to  be  a  member  of  a 
jury  that  had  to  try  an  action  brought  by  a 
labour  leader,  a  man  who  spends  his  hfe  in 
organizing  the  workers  and  trying  to  get  them 


THE  WORKERS  89 

better  conditions  and  better  pay.  The  case  was 
long  and  complicated,  and  its  hearing  took 
several  days.  At  luncheon  time  on  the  first 
day  of  the  trial  another  member  of  the  jury 
— a  nice  plump,  cheery,  kindly,  rosy-gilled, 
white-moustached  person— remarked  to  me  as 
we  munched  a  sandwich  together  that  he  thought 
this  fellow  (the  plaintiff)  ought  to  be  in  jail  as 
a  firebrand  and  a  dangerous  agitator,  adding 
that,  of  course,  this  view  did  not  in  any  way 
bias  him.  Such  was  this  very  nice  old  gentle- 
man's view  of  a  man  who  is  trying,  according 
to  the  best  of  his  lights,  to  right  a  mistake  in 
our  civilization  at  which  happier  generations  will 
some  day  scoff  and  marvel.  The  labour  leader 
in  question  had  never  incited  any  one  to  violence, 
or  uttered  stupid  remarks  in  public  about  the 
King  or  the  flag,  or  made  any  of  the  other 
mistakes  with  which  labour  leaders  so  often 
damage  themselves  and  their  cause.  Nothing 
of  the  kind  was  brought  forward  against  him, 
and  there  was  a  formidable  array  of  King's 
Counsel  engaged  on  the  other  side,  who  would 
certainly  have  brought  anything  of  the  kind 
to  the  notice  of  the  jury.     The  only  thing  against 


90  POVERTY  AND  WASTE 

him  was  that  he  had  tried  by  organization, 
strikes,  and  other  entirely  legitimate  means 
to  get  better  conditions  and  better  wages  for 
working  men.  This  was  enough  to  condemn 
him  to  jail  in  the  eyes  of  a  very  pleasant  and 
apparently  kind-hearted  gentleman. 

Strikes  are  very  tiresome  and  inconvenient, 
and  cause  great  misery  to  the  workers  them- 
selves. They  are  a  barbarous  weapon,  only 
justified  by  the  barbarous  evil  that  they  are 
used  to  fight.  But  how  much  of  the  improve- 
ment in  their  lot,  which  they  won  in  the  last 
century,  would  the  workers  have  seen  if  they 
had  never  struck,  or  threatened,  or  been  thought 
to  be  likely,  to  strike  ?  Since  this  "  put-him- 
in-jail"  policy  expresses  the  attitude  of  too 
many  educated  people  towards  labour,  can  we 
wonder  that  labour  should  sometimes  make 
mistakes,  and  believe  that  it  is  down-trodden 
and  exploited  by  capitalists  and  employers  ? 

There  is  plenty  of  excuse  for  bitterness  on 
the  part  of  the  workers,  but  it  will  not  do  them 
any  good.  Bitterness  and  violence  are  quite 
out  of  place  in  a  matter  of  business,  and  this 
whole  question  of  a  fairer  sharing  of  the  world's 


THE  WORKERS  91 

wealth  is  a  matter  of  business  and  nothing  else, 
and  so  has  to  be  tackled  with  good  temper  and 
readiness  to  see  that  there  are  two  sides  to  it. 
It  is  first  of  all  necessary  to  recognize  that  the 
practical  results  of  the  present  state  of  things 
are  economically  disastrous  and  absurd.  It 
is  bad  for  the  community  as  a  whole  that  the 
working  classes  should  be  ill-developed  in  mind 
and  body.  It  is  also  bad  that  they  should  have 
been  driven  to  the  conclusion  that  their  work 
must  not  be  too  efficient  and  that  unless  the 
output  of  the  best  workman  is  kept  down  to 
the  level  of  the  average,  their  power  of  collective 
bargaining  will  be  diminished.  Since  we  are 
all  consumers  and  most  of  us  have  wants 
unsatisfied,  it  ought  to  be  to  the  interest  of 
everybody  that  the  output  of  all  kinds  of  goods 
should  be  as  great  as  possible.  This  state- 
ment is  so  obvious  that  one  is  almost  ashamed 
to  write  it.  And  yet  our  economic  machinery 
has  got  such  a  queer  twist  in  it  somewhere  that 
manufacturers  are  in  chronic  fear  of  over-pro- 
duction and  glut,  and  the  workers  are  convinced 
that  it  does  not  pay  them  to  work  too  well. 
This  conclusion  on  the  part  of  the  workers. 


92  POVERTY  AND  WASTE 

that  the  best  of  them  must  regulate  the  pace 
and  efficiency  of  their  work  by  that  of  the 
average,  is  often  referred  to  as  an  instance  of 
the  tyranny  of  the  Trade  Unions.  Its  results 
are  unfortunate,  and  it  must  often  be  tiresome 
enough  to  good  workmen  who  would  prefer 
to  work  as  well  and  fast  as  they  can  for  the  mere 
joy  of  doing  so,  apart  from  the  question  of 
any  extra  pay  to  be  got.  Nevertheless,  unless 
there  is  a  standard  there  cannot  be  collective 
bargaining ;  if  every  man  were  for  himself 
there  could  be  no  unity,  and  without  collective 
bargaining  and  unity  the  workers  would  find  it 
very  difficult  to  press  their  claim  for  better 
wages.  If  instead  of  abusing  Trade  Union 
tyranny,  people  would  recognize  the  benefits 
got  by  Trade  Union  discipline,  they  would  be 
able  better  to  understand  the  attitude  of  labour 
on  this  point,  though  they  might  still  be  justified 
in  maintaining  that  the  result  of  it  is  bad  for 
the  workers  and  bad  for  the  consumer  and  bad 
in  short  for  everybody  concerned. 

Another  economically  bad  result  of  our 
present  arrangements  is  the  view  often  held 
by  the  workers  that  if  they  work  too  hard  and 


THE  WORKERS  93 

too  regularly  they  will  use  up  all  the  work  that 
is  available,  and  so  increase  unemploymeHt. 
In  this  theory  they  have  a  certain  justification 
in  fact  owing  to  the  limitation  of  the  volume 
of  industry  by  lack  of  capital.  But  this,  again, 
only  shows  how  twisted  and  stupid  our  economic 
machinery  has  become.  Until  all  the  wants  of 
mankind  are  satisfied,  there  could  be  no  lack 
of  work  to  be  done  in  a  sensibly  arranged 
economic  system. 

In  fact,  the  more  one  contemplates  the 
absurdities  of  our  economic  system,  with  its 
violent  fluctuations  of  buoyancy  and  depres- 
sion in  trade  and  finance,  its  terrible  weakness 
in  the  face  of  panic  and  war  scares,  its  ill-paid 
workers  and  over-fed  hangers-on,  the  crowd 
of  speculators  that  it  breeds,  tragical  alike  in 
their  success  and  their  failures,  the  huge  fortunes 
amassed  by  quite  stupid  people  because  they 
have  diligently  sold  stupid  things  to  still 
stupider  people,  these  same  huge  fortunes  then 
passed  on  to  a  further  generation  of  stupidities 
which  finds  itself  invited  to  lord  it  over  the  rest 
of  humanity  with  the  power  of  its  money-bags 
— with  all  these  absurdities  before  us  we  cannot 


94  POVERTY  AND  WASTE 

wonder  when  hasty  enthusiasts  decide  that  the 
only  thing  to  be  done  is  to  turn  the  whole 
system  upside  down  and  start  afresh  with 
Socialism,  or  Syndicalism,  or  anything  else  that 
means  a  clean  slate. 

To  under-paid  workers  the  attractions  of 
SociaHsm  must  be  as  alluring  as  the  sight  of 
an  inn  to  a  thirsty  traveller,  and  there  is  no 
need  to  marvel  at  the  number  of  converts  that 
this  new  faith  has  made  among  them.  To  any 
of  us  who  respect  order  and  discipline  and 
common  sense,  a  system  under  which  the  real 
wants  of  a  community  were  provided  for,  by 
the  ordered  and  organized  work  of  its  members, 
seems  immeasurably  better  than  one  in  which 
the  guidance  of  industry  is  left  to  a  number  of 
disconnected  units  which  work  haphazard,  and 
by  making  guesses  about  what  sort  of  goods  their 
public  will  want,  or  can  be  induced  to  believe 
that  it  wants,  by  much  outlay  on  advertising 
and  touting.  If  Socialism  were  possible — if 
any  nation  could  produce  a  Government  able 
really  to  tackle  the  business  of  working  its 
industry  as  an  organized  whole — the  economic 
benefit  would  be  very  great.     All  the  miserable 


THE  WORKERS  95 

waste  involved  by  competition  and  advertising 
would  be  saved,  all  the  effort  that  is  now 
frittered  away  in  piecemeal  endeavours  that 
come  to  nothing  would  be  turned  to  profitable  use. 
There  might  be  less  enterprise  and  less  readiness 
to  try  new  ventures,  but  the  known  wants  of 
man — or  such  known  wants  as  the  Government 
thought  fit  to  satisfy — could  be  satisfied  with 
much  less  effort,  if  that  effort  were  concentrated 
and  organized  by  one  great  machine. 

But  in  the  first  place  nations  have  Govern- 
ments which  are  nearly  as  fallible  as  the  average 
citizen,  and  great  as  the  economic  advantages 
would  be  of  industry  ideally  worked  by  an  ideal 
Government,  even  greater  would  be  the  disasters 
that  would  result  from  the  mistakes  of  a  weak 
and  stupid  Government  struggling  with  a  task 
that  was  beyond  its  powers.  Now,  an  industrial 
error  of  judgment  affects  a  few  shareholders 
and  adventurers.  Under  SociaHsm  it  might 
impoverish  a  people.  Moreover,  even  if  by 
some  miracle  we  could  evolve  an  ideal  Govern- 
ment— and  perhaps  already  the  Prussian  and 
Japanese  bureaucracies  are  nearly  skilful  and 
diligent  enough  to  handle  such  an  undertaking 


96  POVERTY  AND  WASTE 

— its  efforts  would  be  of  no  avail  unless  it  had 
an  ideal  people  to  organize  and  direct.  The 
stock  economic  argument  against  Socialism, 
that  no  one  would  work  well  unless  he  were 
working  for  his  own  profit,  is  a  libel  on  human 
nature  based  on  the  old  fallacy  that  men  only 
work  in  order  to  grow  rich,  and  that  their  object 
in  Hfe,  economically  speaking,  is  to  get  as  much 
wealth  as  they  can  with  as  little  work  as  they 
can.  This  may  be  true  of  man  viewed  in  the 
abstract  as  a  purely  economic  agent,  which  he 
never  was--even  Shylock  preferred  a  slice  of 
Antonio  to  thrice  the  sum  due  to  him.  Viewed 
as  a  living  fact,  man  is  an  active  little  animal, 
stung  by  the  bite  of  a  gadfly  that  makes  him 
want  to  work  and  be  busy  and  do  things.  But 
though  it  is  true  that  most  men  really  work 
because  they  want  to,  it  does  not  follow  that 
they  would  want  to,  if  they  were  made  to  by 
Government.  A  much  stronger  sense  of  col- 
lective responsibihty  and  unity  of  interest  has 
to  be  grown  among  us  before  we  are  fit  for 
Socialism.  WTien  it  has  been  grown,  the  form 
of  Government  under  which  we  live  will  not  be 
a  matter  of  great  moment. 


THE '  WORKERS  97 

Moreover,  great  as  the  economic  advantages 
of  Socialism  would  be,  if  it  were  worked  by 
an  ideal  people  under  an  ideal   Government, 
economic  advantage  is  not  the  only  question. 
Man  does  not  live  by  wealth  alone,  and  it  is 
liJcely  that  he  would  become  very  flabby  in 
moral  fibre  if  he  were  organized  and  regulated 
and  ticketed  and  docketed  as  he  would  have  to 
be  in  a  Socialistically  organized  State.     If  a 
man  is  to  learn  to  be  a  man  he  has  to  be  allowed 
to  make  a  fool  of  himself  as  and  if  he  pleases. 
In  other  words,  he  must  have  freedom  of  choice, 
real  or  imaginary.     With  most  of  us  the  freedom 
is  imaginary  rather  than  real,  since  we  are  bound 
so  tight  in  the  chains  of  circumstances  and  of 
all  that  has  gone  before  that  we  have  little  or 
no  choice  but  to  plough  along  our  furrow  until 
the  end.     Still  we  always  flatter  ourselves  that 
we  are  much  freer  than  we  are,  and  this  delusion 
is  quite  as  good,  by  way  of  mental  tonic,  as  the 
fact  of  freedom.     Moreover,   we  could,   if  we 
were  really  driven  into  a  corner,  cut  ourselves 
loose  and  make  a  fresh  beginning.     Under  a 
thoroughly  organized  Socialistic  system  every 
one  would  have  to  do  as  he  was  told,  whether 


98  POVERTY  AND  WASTE 

he  liked  it  or  not,  and  there  would  be  no  merit 
in  holding  on  to  the  plough.  We  should  be 
like  boys  who  are  kept  under  so  strict  a  watch 
by  their  masters  that  they  cannot  do  anything 
naughty.  Though  they  do  nothing  naughty, 
it  does  not  follow  that  they  are  good  boj^s, 
because  they  are  not  moral  agents  at  all,  having 
no  choice. 

It  may  be  urged  that  under  Socialism  pro- 
duction would  be  so  well  organized  that  we 
should  all  have  much  more  leisure,  and  so  more 
chance  of  following  our  own  bent ;  and  this  is 
probably  true,  always  assuming  an  ideal  Govern- 
ment and  an  ideal  people ;  but,  nevertheless, 
the  chief  business  of  a  man's  life  would  be 
carried  out  under  an  iron  discipline,  which  would 
be  very  comfortable  and  simple  for  the  easy- 
going and  unenterprising,  but  would  tend  to 
make  them  flabby-minded  machines,  while  it 
might  break  the  heart  and  spirit  of  the  nobler 
natures. 

There  is  no  need,  however,  to  consider  the 
advantages  and  disadvantages  of  Socialism  in 
the  full  sense  of  the  word,  implying  (if  I  under- 
stand it  aright)   an  organization  so  complete 


THE  WORKERS  99 

that  the  work  of  every  citizen  is  determined 
for  him  and  consequently  also  his  remuneration. 
For  in  this  sense  Socialism  is  not  yet  a  practical 
question.  Before  it  can  be  a  practical  question 
many  gallons  of  argument  will  have  to  be  poured 
out,  perhaps  a  few  heads  will  have  to  be  broken, 
and  a  new  spirit  must  be  abroad  among  us. 
All  this  may  happen  some  day,  if  enough  people 
can  be  made  to  believe  that  it  ought  to  happen. 
In  this  book  I  am  only  trying  to  show  what 
every  one  can  do,  here  and  now,  to  chip  away 
one  or  two  bricks  from  the  sordid  edifice  of 
poverty.  We  so  often  have  SociaHsm  put  before 
us  as  a  remedy  for  all  social  evils,  that  its 
impossibihty,  under  present  conditions,  had  to 
be  pointed  out.  In  its  narrower  sense,  implying 
the  duty  of  Government  to  govern,  and  to 
interfere,  if  necessary,  in  the  interests  of 
humanity  and  national  welfare,  with  so-called 
economic  laws,  Socialism  has  already  won  its 
victory  and  has  only  to  use  it  with  prudence 
and  discretion. 

How,  then,  are  we  going  to  do  anything 
towards  unravelling  this  stupid  economic  tangle 
that  has  twisted  the  minds  of  the  workers  into 


100  POVERTY  AND  WASTE 

the  belief  that  it  is  better  for  them  not  to  work 
too  well  ?  It  is  no  use  to  try  to  argue  with  them 
about  it,  for  the  logic  of  the  matter  is  on  their 
side.  As  things  are  they  are  quite  right.  If 
they  work  harder  and  produce  more,  it  does 
not  therefore  follow  that  they  will  be  any  better 
off,  except  possibly,  and  then  very  remotely 
and  indirectly  and  almost  inappreciably,  as 
consumers.  They  will  not  be  directly  better 
off  unless  at  the  same  time  they  can  insist  on 
higher  wages,  and,  on  the  other  hand,  there  will 
be  so  much  less  work  to  be  done.  Why  should 
nine  workmen  consent  to  be  *'  speeded  up  "■ 
so  that  a  tenth  may  be  thrown  out  of  his  job  ? 
It  may  be,  must  be,  to  the  interest  of  the  com- 
munity as  a  whole,  that  the  industrial  output 
should  be  as  great  as  possible,  but  it  is  only  to 
the  interest  of  the  workers  that  this  should  be 
so  if  they  can  be  sure  that  they  themselves  will 
get  some  definite  increase  in  their  share  of  the 
good  things  that  are  made  more  plentiful. 
Under  present  conditions  this  is  not  so.  They 
may  get  it  in  the  shape  of  increased  wages  or 
cheapened  goods,  or  they  may  not.  If  capital 
is  scarce  and  development  and  enterprise  are 


THE  WORKERS  loi 

slack  and  timorous,  the  demand  for  labour  will 
not  be  keen  enough  to  enable  the  workers  to 
get  better  wages  ;  and  if  the  increased  output 
of  industry  takes  the  shape  of  luxuries,  there  will 
be  no  cheapening  of  the  necessaries  of  life.  We 
are  back  again  at  our  old  thesis.  The  extra- 
vagance of  the  rich  increases,  perhaps  causes, 
the  poverty  of  the  poor.  If  capital  were  more 
rapidly  accumulated  and  more  steadily  devoted 
to  the  production  of  necessaries,  wages  w^ould 
rise  and  necessaries  would  be  cheaper. 

But  the  workers  can  do  much  for  themselves. 
Already  they  have  done  much  for  themselves, 
but  they  can  do  much  more.  They  can  organize 
and  husband  their  resources,  and  insist  on 
longer  and  better  education  for  their  children. 
The  extent  to  which  they  have  already  organized 
themselves  is  a  marvel  of  achievement  under 
great  difficulties,  but  it  has  to  be  carried  much 
further  before  they  can  bring  their  sheaves 
home.  Lately  there  has  been  shown  a  tendency, 
especially  among  the  younger  spirits,  to  weaken 
the  organization  of  the  workers  by  starting 
strikes  without  the  authority  of  their  leaders, 
and  by  refusing  to  abide  by  agreements  entered 


102  POVERTY  AND  WASTE 

into  by  their  representatives.  The  leaders, 
it  is  said,  become  too  phant  and  weak-kneed 
in  the  hands  of  the  employers  and  enter  into 
agreements  which  tie  the  hands  of  the  workers 
too  tight.  It  may  be  so  sometimes,  and  in 
any  case  it  is  most  natural  that  the  rank  and 
file  should  often  grow  impatient  as  they  see 
the  world  ever  growing  richer  and  their  own 
lot  so  drearily  slow  in  being  bettered.  It  is 
most  natural,  and  this  impatience  is  all  to  the 
good  if  it  goes  into  the  right  channel  and  makes 
the  workers  keener  to  do  all  that  can  be  done 
to  quicken  the  pace  of  their  betterment.  But 
all  that  they  have  so  far  achieved  they  have 
achieved  through  unity  and  discipline,  and  if 
small  knots  of  discontented  individuals  try  to 
improve  matters  by  disregarding  the  authority 
of  their  leaders,  and  forcing  the  employers  to 
the  view  that  agreements  entered  into  by  the 
men's  representatives  cannot  be  relied  on,  the 
force  of  the  labour  movement  will  be  very 
seriously  weakened. 

Violence  and  intimidation  are  ugly  things^ 
and  it  is  easy  for  us  who  have  never  known  what 
it  is  to  go  to  bed  hungry  to  describe  them  as 


THE  WORKERS  103 

outrages  on  civilization.  So  they  are.  So  is 
the  existence  of  poverty.  Two  wrongs  do  not 
make  a  right,  but  the  fact  that  the  system, 
against  which  the  workers  have  to  fight,  is 
one  which  is  full  of  glaring  weaknesses,  should 
make  us  hesitate  about  condemning,  with 
too  vigorous  rhetoric,  the  mistakes  that  the 
workers  make  in  the  course  of  their  struggle. 
When  men  go  on  strike  because  they  see  them- 
selves left  poor  in  a  world  full  of  wealth  that 
they  help  to  create,  a  certain  exasperation  is 
natural  and  inevitable  when  other  men  make 
their  victory  difficult  by  remaining  at  work. 
That  this  exasperation  should  express  itself 
in  violence  and  intimidation  is  a  lamentable 
blunder  on  the  part  of  the  workers,  but  it  is 
a  blunder  which  any  one  who  is  human  would 
be  exceedingly  likely  to  commit  if  he  found 
himself  in  the  same  position. 

How  serious  the  blunder  is  may  be  seen 
from  the  effect  that  it  has  on  the  rest  of  the 
community.  It  turns  public  sympathy  against 
the  workers  and  brings  out  amateurs  ready  to 
take  the  place  of  the  strikers,  as  lately  happened 
at  Leeds   and  in  New  Zealand     Every  time 

H 


104  POVERTY  AND  WASTE 

this  happens  it  lessens  the  chance  of  success 
for  a  strike.  If  the  workers  rouse  the  feehngs 
of  the  rest  of  the  community  too  far,  the  com- 
munity is  quite  capable  of  organizing  a  force  of 
semi-amateurs  ready  to  turn  their  hands  to  any 
task  that  may  be  left  in  suspense  by  strikers. 
Members  of  the  middle  class,  well  enough 
educated  to  be  able  to  pick  up  a  knack  of 
work  quickly,  might  often  turn  the  tables  in 
an  industrial  emergency. 

If  the  middle  class  can  thus  make  the  success 
of  strikes  difficult  by  becoming  workmen  for 
the  time  being,  it  is  clear  that  the  workmen  must 
be  very  careful  to  refrain  from  setting  this 
machinery  in  motion.  This  they  can  best 
do  by  taking  care  always  to  have  justice  and 
reason  on  their  side,  and  by  playing  their 
game  on  the  lines  of  the  strictest  fairness. 
Justice  and  reason  are  naturally  on  the  side 
of  under-paid  men  who  want  more,  if  the 
industry  that  they  work  for  can  afford  to  pay 
it.  The  middle  and  upper  classes  are  ready 
enough  to  feel  shocked  and  uncomfortable  when 
they  are  suddenly  reminded  of  the  hours  that 
the  workers  work,  the  work  that  they  do,  and 


THE  WORKERS  105 

the  pay  that  they  get.  The  fact  that  it  is  bad 
business  and  absurd  and  unfair  for  the  hardest 
workers  of  the  community  to  be  chronically 
under-fed,  ill-clad,  and  ill-housed  is  forcing 
itself  on  an  ever-widening  circle  of  thoughtful 
people.  But  alongside  of  this  growing  con- 
viction there  smoulders  an  ever-ready  feeling 
of  testy  resentment  against  what  are  thought 
to  be  unfair  methods  employed  by  labour  to 
achieve  its  ends,  and  this  resentment  is  apt 
to  blaze  out  when  the  workers  disregard  agree- 
ments made  by  their  leaders,  or  employ  violence 
and  intimidation  against  those  who  refuse  to 
strike,  or  when  they  take  advantage  of  some 
pressing  need  of  the  community,  as  when  coal 
porters  strike  during  a  time  of  hard  frost.  This 
resentment  may  or  may  not  be  unfair  or 
exaggerated  by  lack  of  imagination  on  the  part 
of  those  who  cherish  it,  but  it  is  a  very  real 
force,  and  the  workers  cannot  afford  to  rouse  it 
or  ignore  it. 

If  they  are  dissatisfied  with  their  leaders 
it  is  better  to  replace  them  than  to  leave  them 
in  a  position  in  which  their  power  to  help  the 
cause  of  labour  is  weakened  by  the  action  of 


io6  POVERTY  AND  WASTE 

those  whom  they  represent.  In  the  face  of 
the  compact  and  mighty  combinations  of  the 
employers  it  seems  to  be  the  worst  of  tactics 
for  the  men  to  weaken  the  discipHne  of  their 
own  army.  Their  way  to  success  lies  through 
improving  it  and  through  widening  its  scope 
so  that  every  worker  shall  be  a  member  of  it. 
They  will  not  do  this  by  throwing  about  pretty 
epithets  like  "  scab  "  and  "  blackleg,"  but  by 
showing  so  strong  a  front  that  no  worker  can 
afford  not  to  stand  with  them. 

Again,  the  workers  can  greatly  improve 
the  strength  of  their  position  by  more  regular 
working.  It  is  a  common  complaint  among 
employers  that,  when  times  are  good  and  work 
is  plentiful  and  wages  are  high,  they  cannot 
get  their  men  to  work  5|  days  a  week.  Here 
is  an  extract  from  a  letter  from  a  "  Suffering 
Shipowner,"  which  appeared  in  the  Times  of 
April  17,  1913  :— 

"  There  is  another  condition  which  operates 
against  quick  delivery  :  the  scale  of  wages  to 
the  men  employed  is,  as  is  well  known,  very 
much  higher  than  that  of  even  two  years  ago, 
and  the  men  in  many  instances,  notably  that 


THE  WORKERS  107 

of  riveters,  earn  as  much  now  in  four  days  as 
they  used  to  earn  in  five  and  a  half  days.  If 
they  worked  the  full  week  they  would  benefit 
themselves,  their  employers,  and  owners.  Un- 
fortunately for  all  parties,  this  does  not  suit 
the  men ;  on  the  contrary,  the  majority  of 
such  men  refuse  to  work  more  than  the  four 
days,  the  spirit  of  thrift  or  economy  being, 
except  in  isolated  cases,  unknown,  or,  if  known, 
despised  by  them.  Overtime  is  tabooed  by  the 
various  unions. 

"  I  have  httle  doubt  that  the  chief  reason 
for  the  placing  of  the  orders  to  which  you  refer 
with  French  builders  is  the  much  greater  reUance 
that  can  be  put  upon  date  of  delivery,  as  the 
French  workmen  welcome  busy  times  as  enabling 
them  to  add  to  their  savings,  whereas  the  British 
workmen  welcome  them  as  giving  them  the 
means  to  spend  money  on  personal  entertain- 
ment, to  gratify  which  they  utilize  the  time 
when  they  could  be  earning  further  wages  for 
the  good  of  themselves,  their  families,  and  the 
community  in  general." 

Now,  pubHc  sympathy  for  under-paid 
workers   is    difficult    to    cultivate,    if   workers 


io8  POVERTY  AND  WASTE 

take  three  days*  holiday  in  every  seven,  and 
refuse  to  earn  good  wages  while  they  can.  If 
they  made  hay  while  the  sun  shone  they  could 
lay  up  a  store  against  a  rainy  day,  making  their 
position  much  stronger  if  a  strike  became 
necessary,  and  even  accumulating  a  stock  of 
capital.  If,  then,  they  could  further  develop 
the  gift  of  management — and  the  number  of 
managers  who  have  risen  from  the  ranks  shows 
that  there  is  plenty  of  it  among  them — they 
would  have  peacefully  achieved  the  Syndicalist 
ideal,  and  the  workers  would  be  capitahsts, 
managers,  and  workers  off  their  own  bats. 

All  these  counsels  of  moderation  and  restraint 
which  are  so  easy  for  those  who  have  never 
felt  the  pinch  of  poverty  to  prescribe,  require 
a  great  effort  before  they  can  be  put  in  practice 
by  those  whose  education  has  been  chiefly  in 
the  rough  school  which  teaches  those  at  the 
bottom  of  the  industrial  ladder  how  to  face 
the  facts  of  life.  The  sacrifices  that  the  workers 
cheerfully  make  for  one  another  and  the  common 
interest  of  their  class  compel  admiration  and 
respect.  The  sums  that  they  pay  to  support 
members  of  other  trades  on  strike  are  wonderful, 


THE  WORKERS  109 

when  we  consider  the  scale  on  which  they  are 
paid,  and  the  domestic  budgets  on  which  they 
are  expected  to  bring  up  famiUes.  The 
sympathetic  strike  is  itself  a  remarkable  example 
of  readiness  to  suffer  hardship  on  the  part  of 
workers  who  themselves  have  no  grievance  to 
strike  about,  but  are  ready  to  leave  their  work 
to  help  the  struggle  of  others.  It  sometimes 
rouses  the  resentment  of  the  middle  classes,  but 
at  least  they  must  acknowledge  that  it  involves 
a  fine  act  of  self-sacrifice  by  those  who  carry 
it  out. 

With  these  proofs,  so  often  and  so  readily 
given,  that  the  workers  are  gifted  with  qualities 
which  may  well  be  envied  by  those  who  have 
been  more  gently  trained  and  nurtured,  there 
is  good  reason  to  hope  that  their  progress  along 
the  line  of  unity  may  help  them  to  a  victory 
which  will  wipe  out.  a  bad  blot  on  our  civiliza- 
tion. This  hope  is  greatly  strengthened  by  the 
eagerness  with  which  many  of  them  are  reaching 
out  for  the  fruits  of  education,  making  astonish- 
ing sacrifices  of  their  scanty  leisure  in  order  to 
grasp  them,  and  producing  extraordinary  results. 
These  results,  indeed,  will  be  a  rude  shock  to 


no  POVERTY  AND  WASTE 

those  who  beheve  that  intellect  is  a  thing  that 
it  takes  generations  to  develop,  and  base  on 
this  theory  a  comfortable  belief  that  the  so-called 
cultivated  classes  must  always  have  reason 
and  sound  judgment  in  their  keeping,  because 
they  alone  have  minds  which  are  susceptible 
to  real  education.  In  an  article  in  the  Morning 
Post  of  April  29,  1910,  describing  the  work  and 
progress  of  the  Workers*  Educational  Associa- 
tion, which  organizes  lectures  and  classes  for 
mill  hands  and  other  workers,  it  was  stated 
that  "  the  standard  of  work  achieved  in  the 
first  classes  started  was  remarkably  high.  An 
experienced  history  examiner  in  Oxford,  who 
went  through  a  large  number  of  essays,  selected 
at  haphazard,  made  the  deliberate  pronounce- 
ment that  over  one-third  of  them  reached  the 
first-class  standard  of  the  Oxford  Modern 
History  School." 

Such  is  the  astonishing  result  of  scattering 
the  seeds  of  knowledge  among  men  whose 
leisure  for  learning  is  so  scanty  that  "it  is 
no  rare  occurrence  for  a  student  to  sit  up  working 
till  one  o'clock  in  the  morning  and  then  to 
enter  the  mill  at  6.30  a.m.  as  usual."- 


THE  WORKERS  iii 

This  startling  revelation  of  intellectual  power, 
brought  out  in  the  face  of  such  difficulties,  calls 
attention  to  the  terrible  waste  of  human  mind 
that  is  caused  by  our  present  system.  As 
things  are,  it  is  possible  for  the  workers  to  pick 
up  a  few  crumbs  of  real  knowledge  through  an 
effort  which  can  only  be  made  by  those  whose 
hunger  for  it  is  so  keen  that  it  will  surmount 
almost  incredible  obstacles.  The  power  that 
these  few  heroes  of  the  battlefield  of  knowledge 
have  shown,  of  assimilating  and  reproducing 
such  teaching  as  can  be  put  before  them, 
proves  that  a  great  hidden  store  of  inteUigence 
every  year  goes  to  waste,  and  is  never  brought 
into  being,  because  those  at  the  bottom  of  the 
ladder  are  not  given  a  fair  chance  of  developing 
the  mind  that  is  in  them.  Intelligence  is  an 
article  that  is  highly  prized  in  the  business 
world.  A  man  who  knows  how  to  work  and  can 
bring  a  real  mind  to  his  work  is  often  looked 
for  in  vain  when  an  enterprise  has  to  be  started 
or  extended,  and  yet  the  minds  of  the  great 
majority  of  the  population  are  allowed  to  run 
to  seed.  Our  economic  arrangements  are  such 
that  their  education,  such  aS'  it  is,  leaves  off  at 


112  POVERTY  AND  WASTE 

the  age  of  thirteen  or  fourteen,  just  when  it 
ought  really  to  be  beginning  in  earnest.  The 
economic  waste  involved  by  this  piece  of 
stupidity  is  incalculable. 

Politically  and  morally  the  waste  is  perhaps 
even  greater.  Consider  what  the  position  and 
strength  of  a  nation  would  be  if  every  one  of  its 
citizens  were  a  fully  developed  man  with  all  his 
powers  of  mind  and  body  properly  trained  in 
his  youth  before  he  was  set  to  fight  life's  battle. 
With  its  store  of  trained  intelligence,  ready 
adaptability,  and  force  of  mind  and  body,  it 
would  face  the  problems  of  national  and  human 
existence  with  a  collective  vigour  such  as  can 
hardly  now  be  imagined.  Incidentally,  if  it 
were  so  minded  it  could  wipe  the  floor  of  the 
earth  with  any  other  nation  with  which  it 
happened  to  disagree.  But  it  might  fairly 
be  expected  that  its  wide  understanding,  well 
founded  self-confidence,  and  good  health  of 
mind  and  body  would  give  it  a  most  serene  and 
sunny  temper  and  teach  it  to  win  its  victories, 
as  it  easily  could,  without  any  appeal  to  the 
weapons  of  the  wild  beast. 

"  But,"  I  shall  be  told.  *'  the  workers  would 


THE  WORKERS  113 

be  discontented  and  unruly.  You  could  not 
get  a  man  to  be  a  platelayer  or  a  stoker  if  he 
had  intelligence  enough  to  work  with  his  head. 
Everybody  would  want  to  be  a  Government 
official  or  an  editor  or  a  bishop." 

This  objection  is  not  a  very  serious  obstacle. 
In  the  first  place,  are  the  workers  happy  and 
contented  now,  and  have  they  any  right  to  be, 
and  have  we  any  right  to  be,  until  their  lot  has 
been  bettered  ?  In  the  second,  it  is  surely  true 
that  work  with  the  hands  is  made  more  interest- 
ing and  attractive,  and  is  also  much  better 
done,  if  the  mind  of  the  worker  is  fully 
trained.  Some  of  us  who  work  with  our  heads 
in  offices  would  prefer  to  work  in  the  fields  or 
at  sea  or  on  the  footplate  of  an  engine.  But 
we  did  not  know  as  much  when  we  began  hfe 
as  we  know  now,  and  fate  and  the  force  of 
circumstances  drove  us  we  knew  not  whither. 
In  a  nation  with  a  really  trained  intelligence, 
work  with  the  hands  would  be  seen  to  be  just 
as  fine  a  thing  as  work  with  the  head.  As  it  is, 
a  great  cricketer  is  a  much  bigger  man  in  the 
eyes  of  the  pubUc  than  a  great  poHtician  or 
a  great  thinker.     In  fact,  it  may  be  said  that 


114  POVERTY  AND  WASTE 

bodily  prowess  in  games  now  opens  the  shortest 
way  to  the  respect  and  admiration  of  man.  A 
very  slight  change  of  mental  habit  would  give 
bodily  prowess  in  work  its  right  position. 

But  is  it  possible  to  educate  all  our  workers 
and  train  them  to  the  full  in  mind  and  body  as 
all  men  should  be  trained  ?  Not  as  things  are 
now,  or  all  in  a  moment.  As  things  are,  if  we 
even  added  two  or  three  years  to  the  spell  of 
so-called  education  that  is  now  given  them, 
many  poor  famiUes  that  depend  on  the  earnings 
of  their  children  would  be  reduced  to  straits 
that  would  have  bad  economic  effects.  But  it  is 
absurd  to  suppose  that  with  the  world's  mighty 
productive  power  we  could  not  afford  to  make 
everybody  a  real  man,  in  mind  and  body,  before 
he  goes  to  work,  if  only  the  world's  productive 
power  were  more  sensibly  organized,  and  if 
the  produce  consisted  more  largely  of  things 
that  are  wanted  and  less  of  things  that  people 
buy  from  force  of  habit  or  convention.  And  the 
shortest  and  easiest  way  to  achieve  this  reform 
is  to  persuade  those  who  have  the  buying 
power  to  think  more  carefully  about  their 
responsibility  in  spending. 


CHAPTER  VI 

MIDDLEMEN  AND  HANGERS-ON 

If  after  dealing  with  the  capitalist  and  the 
employer  and  the  worker  we  were  able  to  go 
straight  on  to  the  consumer,  our  problem  would 
be  very  much  easier  to  solve.  But  anything 
that  has  been  grown  or  made  usually  has  to 
go  a  long  way  and  pass  through  many  hands 
before  it  comes  into  the  possession  of  the  man 
who  finally  eats  it  or  wears  it  or  otherwise 
consumes  it.  And  every  pair  of  hands  through 
which  it  passes  takes  toll  of  it,  that  is  to  say, 
adds  something  to  the  price  that  the  final 
consumer  pays,  or  takes  something  off  the  profit 
that  goes  to  shareholders  in  the  producing 
company,  or  off  the  wages  that  can  be  paid  to 
the  workers  who  made  it. 

Most  of  these  intermediaries  are  necessary. 
It  is  easy  to  talk  of  doing  away  with  the  middle- 
man, but  when  he  is  done  away  with  he  usually 


Ii6  POVERTY  AND  WASTE 

comes  to  life  again  in  another  form  or  under 
another  name.  The  most  clearly  necessary 
intermediary  is  the  transporter,  the  owner  of 
the  ship,  railway  and  wagon  that  have  to  convey 
the  stuff  from  maker  to  consumer.  There  is 
also  at  least  one  merchant,  a  broker  or  two, 
and  the  shopkeeper  who  finally  makes  the  retail 
sale  to  the  consumer.  Furthermore,  there  is 
another  chain  of  people  who  are  just  as  essential 
as  the  transporters — namely,  the  bankers, 
financiers,  billbrokers,  and,  perhaps,  dealers  in 
foreign  exchange,  who  find  the  credit  and  provide 
the  currency  to  finance  the  movement  of  the 
stuff  from  place  to  place,  and  see  to  the  conse- 
quent transfers  of  cash  or  credit. 

Now  we  begin  to  see  the  reason  for  the 
difference,  so  startUng  at  first  sight,  between, 
for  example,  the  coal  that  is  sold  at  the  pit- 
mouth  at  los.  or  12S.  a  ton,  and  costs  us  in 
London  anything  up  to  30s.  It  occurs  at  once 
to  all  amateur  economists  that  it  would  be  an 
enormous  saving  if  we  could  do  away  with  all 
these  middlemen  and  divide  their  gains  between 
the  producer,  his  workers,  and  the  consumer. 
Why  should  not  the  consumer  buy  his  coal  at 


MIDDLEMEN  AND  HANGERS-ON    117 

the  pit-mouth  ?  So  he  could  if  he  were  there 
ready  to  arrange  for  its  carriage,  and,  further, 
if  he  were  prepared  to  buy  a  good  round  mouth- 
filUng  amount,  not  homoeopathic  doses  of  a 
ton  or  two  at  a  time  :  also  he  would  only  buy 
on  the  alluringly  cheap  terms  that  one  sees 
quoted  in  the  papers  if  he  contracted  to  take 
large  quantities  at  regularly  recurring  intervals, 
so  that  the  colliery  company  could  be  sure  of  dis- 
posing of  its  output.  Further,  he  would  have  to 
pay  for  the  carriage  of  the  coal,  and  by  the  time 
he  had  done  so  he  would  find  that  there  was  a 
very  big  hole  in  the  saving  that  he  thought  he  was 
going  to  effect  bydeahng  direct  with  the  producer. 
Now,  as  the  ordinary  consumer  could  not 
possibly  buy  on  the  scale  required  unless  he  had 
a  large  amount  of  capital  to  sink  in  coal  and 
a  large  area  of  space  in  which  to  store  it,  and  as 
he  would  also  have  to  run  the  risk  of  its  deteriora- 
tion before  he  could  use  it,  he  would  at  once 
have  brought  home  to  him  three  services  which 
are  performed  for  him  by  middlemen,  and  would 
hav€  to  be  performed  by  himself — or  somebody 
— as  soon  as  he  did  away  with  the  middleman. 
These  services  are  :    (i)  wholesale  purchase  and 


ii8  POVERTY  AND  WASTE 

retail  selling — the  fact  that  the  merchant  is 
prepared  to  take  away  the  coal  in  big  blocks 
and  store  it  and  sell  it  piecemeal  to  suit  our  con- 
venience i  (2)  the  provision  of  capital  to  bridge 
the  gap  in  time  between  purchase  and  sale ; 
(3)  the  taking  of  the  risks  of  deterioration 
in  quality  if  the  coal  is  not  sold  fast  enough, 
and  of  a  spell  of  warm  weather  which  may 
knock  a  shilling  or  two  off  the  selling  price  of 
coal  before  it  is  sold. 

These  services  have  to  be  paid  for,  just  as 
we  saw  that  the  service  by  the  capitalist  would 
have  to  be  rendered  and  paid  for  even  if  we 
reorganized  society  on  a  Socialistic  basis.  Co- 
operation is  usually  supposed  to  do  away  with 
the  middleman.  But  it  may  more  truly  be  said 
to  be  its  own  middleman.  The  retail  Co-opera- 
tive Societies  do  away  with  one  middleman, 
the  retail  shopkeeper,  but  they  do  so  by  taking 
his  place.  They  buy  goods  from  middlemen, 
the  Wholesale  Co-operative  Societies  or  others, 
and  sell  them  to  their  own  members,  who  have 
supplied  their  capital.  They  pay  a  fixed  rate 
of  interest  on  their  capital,  and  the  rest  of 
their  profit  is  divided  among  their  members  in 


MIDDLEMEN  AND  HANGERS-ON    119 

proportion  to  the  amount  of  their  purchases. 
Their  organization  and  working  expenses  all 
have  to  be  paid  for,  but  they  are  able  to  work 
cheaply  because,  by  their  ingenious  system  of 
paying  dividend  to  purchasers,  they  encourage 
their  members  to  buy  from  them,  and  so  are 
saved  to  some  extent  from  the  risk,  that  the 
ordinary  retailer  has  to  face,  of  not  finding 
customers  for  their  goods. 

Nevertheless,  though  we  cannot  endorse 
the  popular  theory  that  the  middleman  is  an 
unnecessary  nuisance,  there  is  much  to  be  said 
for  the  view  that  he  is  too  costly.  He  has  an 
ugly  habit  of  forming  rings  and  *'  combines," 
in  whose  grip  the  small  producer  and  the  small 
retail  dealer  are  helpless,  and  so  getting  more 
than  his  fair  share.  It  is  a  weakness  in  our 
economic  machinery  that  dealers  and  brokers 
seem,  on  the  whole,  to  be  more  prosperous  than 
the  actual  producer  of  the  goods  that  they 
handle,  and  that  trading  towns  are  more  wealthy 
than  the  purely  industrial,  or  producing,  places. 
Mr.  Dibblee,  in  his  "  Laws  of  Supply  and 
Demand,"  remarks  that  one  of  the  most  remark- 
able of  the  "  prodigious  difficulties  to  be  faced 


120  POVERTY  AND  WASTE 

in  economics"  is  the  "  predominance  in  wealth 
and  capital  of  the  mercantile  as  compared  with 
the  manufacturing  cities  of  the  world.  This 
was  no  less  true  in  the  days  of  Tyre  and  of 
Carthage  or  during  the  commercial  predomi- 
nance of  Florence,  Genoa,  and  Venice.  Each 
of  these  mercantile  queens  had  probably,  for 
purposes  of  military  protection,  to  make,  as 
well  as  to  market,  some  of  her  own  wares,  but 
it  was  the  marketing  that  brought  the  profits." 
Among  other  examples  he  cites  London : 
**  Of  industry  in  the  modern  sense,  which  uses 
'  power '  for  production,  she  is  almost  ignorant. 
.  .  .  Yet  the  wealth  of  London  considerably 
exceeds  that  of  the  next  twelve  cities  in  the 
Empire  taken  together,  and  is  vastly  more 
than  the  combined  wealth  of  the  next  twenty 
purely  industrial  towns,  such  as  Coventry, 
Wolverhampton,  Oldham,  Bolton,  Preston, 
Huddersfield,  or  Toronto,  to  name  only  a  few. 
The  greatest  and  wealthiest  city  in  the  world 
grows  ever  fatter  and  richer  without  herself 
using  more  than  a  small  fragment  of  modern 
industrial  power."  * 

*  Pp.  50  ei  seq. 


MIDDLEMEN  AND  HANGERS-ON    121 

It  is  not  well  that  commerce  should  be  more 
highly  paid  than  industry,  and  that  those  who 
handle  goods  and  pass  them  on  should  get  a 
greater  reward  from  the  community  than  those 
who  make  them.  Yet  it  appears  to  be  so 
wherever  men  trade  and  manufacture.  The 
quickest  and  biggest  fortunes  seem  to  come 
to  those  who  make  a  *Hurn'*  or  commission 
by  passing  something  on.  It  has  already  been 
shown,  however,  that  they  are  necessary  links 
in  the  economic  chain,  and  it  may  be  that  their 
profits  are  not  really  greater  in  the  aggregate, 
but  that  they  are  less  evenly  distributed,  owing 
to  the  big  risks  that  they  take.  More  of  them 
grow  rich  quickly,  but  perhaps  more  of  them 
also  lose  money  and  fail.  Those  who  win  gain 
fame  and  notoriety,  and  we  hear  all  about  them. 
Those  who  fail  lapse  into  obscurity,  and  make 
no  mark  on  the  page  of  economic  history. 

This  speculative  element  in  the  business  of 
the  intermediary  lies  in  the  fact  that  he  takes 
goods  over  in  the  expectation,  which  may  or 
may  not  be  fulfilled,  of  selling  them  again  at  a 
profit.  For  this  risk  he  has  to  be  paid,  and  if 
we  could  eHminate  or  reduce  this  risk  we  could 


122  POVERTY  AND  WASTE 

save  much  of  the  big  profit  that  the  middleman 
earns  when  he  succeeds. 

Herein  lies  one  of  the  great  economies  that 
would  be  effected  by  a  SociaHstic  system  if  it 
were  possible,  and  if  an  ideal  Government 
and  an  ideal  people  could  be  found  to  work  it. 
The  Government,  knowing  exactly  what  things 
were  best  for  the  people  to  consume,  would  have 
those  things  produced  and  distributed  among 
the  people  for  consumption;  and  the  people, 
acquiescing  in  the  taste  and  judgment  of  the 
Government,  would  consume  them.  The  sim- 
plicity and  economy  of  the  whole  arrangement 
would  be  admirable,  but  no  people  now  on  earth 
could  suffer  it  for  a  week. 

What  we  might  be  able  to  endure  is  some 
extension  of  municipal  activity  in  the  direction 
of  providing  cheap  and  good  food  supply, 
enabling  the  poor  of  our  great  towns  to  be  better 
and  more  cheaply  nourished.  But  this  arrange- 
ment, beneficial  though  it  might  be  if  carefully 
worked,  would  not  touch  one  of  the  greatest 
of  our  problems  of  nutrition,  which  lies  in  the 
difficulty  that  the  poor  in  many  country  districts 
find  in  getting  milk  for  their  children,  because 


MIDDLEMEN  AND  HANGERS-ON    123 

the  milk  is  all  sucked  into  the  towns,  flowing 
like  everything  else  to  the  market  that  is  biggest 
and  most  certain  to  absorb  it.  Moreover, 
these  great  reforms  that  have  to  be  undertaken 
and  carried  out  by  folk  in  official  positions  are 
beyond  the  scope  of  this  book.  It  is  only  con- 
cerned with  showing  what  every  citizen  can 
do  to  correct  the  evils  of  our  economic  system 
without  waiting  for  great  measures  to  be  passed. 
This  particular  evil,  which  arises  from  the 
risk  that  the  middleman  has  to  take,  and  the 
big  reward  that  he  consequently  gets  if  he  can, 
can  only  be  corrected  by  us  ordinary  mortals, 
if  we  do  away,  as  far  as  we  can,  with  the  middle- 
man's risk  by  buying  things  that  we  really 
want,  instead  of  wasting  our  substance  on 
luxuries  that  we  do  not  need.  Thereby  the 
stream  of  industry  would  be  concentrated  in 
a  narrower  channel  less  liable  to  ebb  and  flood, 
and  those  who  have  to  make  a  living  by  fore- 
casting the  demands  of  the  public  would  have 
less  margin  of  error,  a  surer  market,  and  less 
chance  of  loss  to  provide  against.  Moreover, 
if  we  could  really  bring  ourselves  to  make  this 
change  in  our  spending  habits,  another  great 


124  POVERTY  AND  WASTE 

economy  would  also  be  brought  about.  We 
should  check  the  roaring  activity  of  advertise- 
ment, with  all  its  waste,  ugliness,  and  absurdity. 

Quite  the  strangest  of  the  queer  features  in 
the  business  arrangements  of  mankind  is  this 
astonishing  and  incredible  growth  of  advertising. 
No  sane  man,  if  he  thought  the  matter  over 
quietly,  would  dream  of  buying  anything  on 
the  mere  assertion,  by  some  one  who  wanted 
to  sell  it,  that  it  was  cheap  or  good.  Yet  we 
do  this  so  habitually  that  those  who  have  goods 
to  sell  find  that  it  pays  them  to  shout  these 
assertions  all  over  our  newspapers  and  streets 
and  landscapes.  Mr.  Dibblee  quotes,  and 
endorses,  an  estimate  by  a  president  of  the 
Incorporated  Society  of  Advertisement  Con- 
sultants, that  a  hundred  millions  sterling  are 
spent  annually  on  advertising  in  this  country, 
and  reckons  a  gross  total  of  £550,000,000  per 
annum  for  Europe  and  North  America.*  These 
millions,  or  most  of  them,  are  paid  by  those  who 
buy  the  goods. 

Advertising  is  not  all  waste.  Within  certain 
limits  it  has  its  uses.     When  a  new  and  really 

•  ''  Laws  of  Supply  and  Demand,"  p.  182, 


MIDDLEMEN  AND  HANGERS-ON    125 

useful  article,  such  as  an  electric  lamp  that  gives 
a  better  light  with  less  current,  is  being  intro- 
duced, the  buying  public  will  hear  of  it  a  little 
more  quickly  through  advertisement.  Or,  if 
we  know  that  we  need  a  thing  and  make  use 
of  advertisement  to  see  where  we  can  get  it 
and  at  what  price,  it  may  be  a  help.  But  it 
can  seldom  be  necessary  to  use  it  for  this 
purpose,  for  if  we  need  any  article  of  common  use 
it  is  almost  certain  that  some  one,  on  whose 
experience  we  can  rely,  can  tell  us  where  to  get 
it  and  what  we  ought  to  pay.  But  there  are 
some  few  things,  in  the  case  of  which  the 
need  is  not  general  but  particular,  and  here 
advertisement  can  really  help  us.  For  instance, 
if  we  want  a  book  to  read  or  some  plants  to  put 
in  the  garden,  a  pubUsher's  Hst  may  show  us 
that  our  favourite  author  has  lately  been 
delivered  of  a  novel,  and  a  seedsman's  catalogue 
may  remind  us  that  a  clump  of  gaillardias  will 
give  our  borders  just  the  blaze  of  colour  that 
we  want. 

This  is  not  real  advertising  in  the  modern 
sense  of  the  word.  It  is  the  glory  and  the  boast 
of  the  skilful  advertiser  that  he  can  make  people 


126  POVERTY  AND  WASTE 

buy  things  that  they  do  not  want.  In  so  far 
as  he  does  so  he  simply  forces  them  to  waste 
their  money,  and  makes  them  pay  him  for 
doing  so.  He  also  justifies  his  energies  on  the 
ground  that,  by  enabling  the  seller  to  sell  in 
huge  quantities,  he  enables  him  to  sell  cheap, 
and  so  benefits  the  consumer  as  well  as  the  maker 
of  the  goods.  It  may  be  so  sometimes,  but  there 
are  many  obstacles  in  the  way  of  this  beneficent 
result.  If  the  maker  is  selling  in  competition 
with  other  advertising  producers,  it  is  com- 
petition rather  than  advertising  that  brings 
the  price  down.  If  his  advertising  wipes  other 
competitors  out  and  gives  him  a  monopoly, 
the  cheapening  of  production  by  manufacture 
on  a  great  scale  is  more  likely  to  put  extra 
profit  into  his  pocket  than  to  give  cheap  goods 
to  the  consumer. 

If  we  made  up  our  minds  for  ourselves  about 
the  things  that  we  need  and  turned  a  deaf 
ear  to  the  interested  voice  of  the  advertising 
charmer,  we  should  not  do  away  with  him 
altogether,  but  we  should  at  least  save  many 
of  the  millions  that  are  now  spent  on  his  wiles. 
I   may  be   told  that  if   advertisements  were 


MIDDLEMEN  AND  HANGERS-ON    127 

reduced  the  Press  could  not  live  ;  but  the  Press 
is  much  too  full  of  life  to  be  killed  even  by  the 
total  loss  of  this  source  of  income.  It  would 
have  to  live  by  giving  us  good  news  and  good 
stuff,  instead  of  by  supplying  space  for  adver- 
tisements, and  so  it  would  be  on  a  sounder 
basis.  The  papers  would  be  much  smaller 
and  perhaps  rather  dearer.  But  their  com- 
mercial success  would  no  longer  depend  on  their 
being  read  by  folk  who  are  weak-minded  enough 
to  be  susceptible  to  advertisements. 

We  are  nearly  at  the  end  of  the  long  list 
of  people  whose  services  have  to  be  paid  for 
before  the  consumer  can  make  any  commodity 
his  own.  So  far  we  have  encountered  the 
capitalist,  the  employer  or  manager,  with  his 
staff  of  clerks,  the  workman,  the  conveyer, 
the  merchant,  the  broker,  the  advertiser,  the 
retail  dealer,  and  the  banker  who  provides  them 
all  with  currency  and  credit.  Here  we  have 
most  of  the  mouths  that  take  a  direct  bite  out 
of  the  earnings  of  production.  But  besides 
these  there  is  a  hungry  horde  whom  pro- 
duction has  to  feed  and  clothe  and  house  and 
provide   with   comforts   and   luxuries,    though 


128  POVERTY  AND  WASTE 

they  have  no  direct  connexion  with  primary 
production.  Among  them  the  most  important 
are  the  rulers,  Government  officials,  civil 
servants,  policemen,  soldiers,  sailors,  and  others, 
who  provide  us  with  governance  and  security. 
Then  there  are  the  lawyers,  doctors,  clergymen 
of  various  kinds,  teachers,  writers,  artists, 
artistes,  stockbrokers,  and  many  other  pro- 
viders for  our  mental,  moral,  and  material 
comforts,  including  the  undertakers  who  finally 
bury  us. 

Their  claims  to  a  big  share  of  the  good  things 
of  the  world  are  very  relevant  to  the  problem 
with  which  we  are  dealing,  that  of  bettering 
the  lot  of  the  workers.  For  since,  as  has  been 
shown,  the  output  of  goods  is  at  all  times  limited 
by  the  amount  of  available  capital,  manage- 
ment, raw  material,  labour  and  means  of  con- 
veyance, the  difficulty  of  increasing  the  worker's 
share  of  the  output  is  greatly  magnified  by 
all  these  claimants  to  a  share  for  services 
rendered  which  are  not  directly  productive. 

Their  claim  is  just  enough  in  most  cases, 
for  some  of  them  render  services  without  which 
the  producers  could  not  produce,  and  others 


MIDDLEMEN  AND  HANGERS-ON    129 

supply  the  entertainment  and  instruction  and 
diversion  and  enlightenment  without  which  the 
producers  would  live  like  convicts  on  a  treadmill. 
But  their  services  are  sometimes  exceeding  costly. 
An  astounding  statement  was  lately  made 
before  the  Royal  Commission  on  Railways. 
Mr.  B.  P.  Wilson,  iron  and  coal  merchant  and 
vice-president  of  the  Ossett  Chamber  of  Com- 
merce (I  quote  from  a  report  in  the  Times 
of  February  7, 1914),  urged  that  "  means  should 
be  taken  to  prevent  railway  companies  incurring 
unnecessarily  heavy  costs  in  promoting  and 
opposing  Bills  in  Parliament.  He  calculated 
that  the  railway  companies  to-day  were  bearing 
a  burden  of  £90,000,000  expended  in  that  way. 
That  must  tend  to  increase  railway  charges." 
The  mind  staggers  before  that  formidable  row 
of  figures.  It  must  indeed  increase  railway 
charges  and  incidentally  diminish  dividends 
and  the  sum  available  for  the  wages  of  the 
workers.  Let  us  just  consider  what  it  means. 
Since  their  first  creation  the  railway  companies 
have  spent  90  milUons,  not  on  developing  and 
improving  their  service,  and  making  the  trans- 
port of  goods  and  people  cheap  and  efficient, 


130  POVERTY  AND  WASTE 

but  in  squabbling  with  one  another,  or  with 
public  authorities,  or  somebody,  before  Parha- 
mentary  Committees.  This  money  has  been 
paid  over  to  people,  chiefly  lawyers  of  various 
kinds,  who  have  helped  the  railway  companies 
to  put  their  view  of  the  case  before  the  wisdom 
of  Parliament.  That  means  to  say,  in  the  first 
place,  that  these  trusty  henchmen  have  received 
90  milhons,  and  to  that  extent  have  been  able 
to  help  themselves  out  of  the  stock  of  goods 
and  services  year  by  year  produced,  and  so 
have  had  the  power,  by  the  use  that  they 
made  of  this  money,  to  influence  the  course 
of  industry  in  one  direction  or  another. 

Further,  this  sum,  which  has  been  so  spent, 
has  been  raised  by  the  railways  on  capital 
account,  that  is  to  say,  they  have  to  pay  interest 
on  it.  If  we  suppose  the  interest  to  be  at 
the  rate  of  3  per  cent,,  this  capital  expendi- 
ture means  that  every  year  and  for  all  time 
the  railways  have  to  take  ;f2, 700,000  out  of 
the  pockets  of  the  public  that  travels  or  sends 
goods  from  place  to  place,  to  meet  the  permanent 
charge  on  the  sum  spent  in  making  clear  their 
disputes  and  protests  to  the  intelligence  of  our 


MIDDLEMEN  AND  HANGERS-ON    131 

legislators.  Probably  the  railway  companies 
could  not  help  it.  We  know  that  in  their  early 
days  great  obstacles  and  difficulties  were  put 
in  their  way  by  people  who  did  not  want  their 
pleasant  estates  and  clean  country  towns  to 
be  made  ugly  and  dirty  by  them.  It  was  a 
very  natural  prejudice,  and  the  fact  that  the 
railways  have  since  greatly  enriched  all  the  nice 
quiet  country  places  that  did  not  want  to  be 
spoilt  by  them  has  not  quite  proved  that  the 
prejudice  was  wrong.  But  the  whole  business 
is  a  striking  example  of  the  way  in  which  the 
hangers-on  of  industry  grow  fat  at  its  expense. 
In  the  same  way  a  large  proportion  of  what 
are  called  the  professional  classes  live  by  "  taking 
in  one  another's  washing,"  by  rendering  one 
another  mutual  services,  which  make  Hfe  com- 
fortable and  pleasant  and  easy  and  secure  for 
those  who  can  enjoy  those  services,  and  give 
them  a  claim  on  the  real  necessaries  of  life, 
the  tangible  goods  that  are  produced  by  industry. 
The  doctor  sells  medical  advice  to  the  lawyer. 
The  lawyer  sells  legal  advice  to  the  doctor. 
Then  they  give  one  another  cheques  which  carry 
with  them  a  claim  on  the  products  of  industry. 


132  POVERTY  AND  WASTE 

These  claims  the  doctor  and  lawyer  can  either 
devote  to  their  own  satisfaction,  or  can  pass 
them  on,  in  the  form  of  wages  and  other  pay- 
ments, to  all  their  various  dependents.  Industry 
has  to  support  them  all  and  does  so  because, 
if  they  did  not  exist,  the  organizers  of  industry 
would  have  to  spend  much  of  their  time  in 
trying  to  doctor  themselves  and  doing  their 
own  legal  business.  It  may  be  that  we  are 
now  finding  the  solution  of  a  mystery  that 
often  clamours  for  an  answer  as  one  walks 
through  a  country  town.  On  what  and  on 
whom  do  its  denizens  live  ?  There  may  not 
be  a  factory  or  a  workshop  in  sight,  but  there 
will  be  rows  of  prosperous-looking  shops,  a 
goodly  array  of  thriving  inns  and  streets  of 
comfortable  houses  in  which  people  are  evidently 
living  in  ease  and  plenty  with  an  army,  or 
at  least  a  regiment,  of  servants,  gardeners, 
chauffeurs,  and  odd  jobs  men  to  wait  on  them. 
They  cannot  all  be  capitalists  living  on  inherited 
wealth.  Perhaps  they  live  by  selling  services  of 
various  kinds  to  the  farmers  in  the  neighbouring 
country,  who  are  busy  in  producing  food  and  raw 
material  out  of  the  ground.     But  it  seems  queer 


MIDDLEMEN  AND  HANGERS  ON  133 

that  they  should  be  so  much  better  off  than  the 
farmers,  to  say  nothing  of  the  farm  labourers. 

The  process  by  which  the  capital  of  the 
railway  companies  was  burdened  with  a  weight 
of  £90,000,000  without  any  direct  increase  in 
their  productive  power  is  technically  described 
as  "watering"  their  capital.  The  burden  laid 
on  industry  by  all  these  people  who  provide 
the  community  with  non-industrial  services 
is  like  so  much  water  put  into  the  capital 
account  of  the  nation.  The  railways  could 
not  help  watering  their  capital,  because  if  they 
had  not  spent  that  money  they  could  not  have 
got  their  Bills  through  Parliament,  and  nearly 
all  companies  start  with  a  certain  amount  of 
water  in  their  capital,  representing  the  goodwill 
of  a  business  bought,  or  other  expenses  essential 
to  their  organization.  In  the  same  way  the 
community  could  not  do  without  the  services 
of  most  of  the  hangers-on  of  industry ;  but 
they  are  so  much  water  in  its  capital,  and  live, 
ultimately,  on  the  brains  and  sweat  of  the 
producers.  This  is  a  fact  that  they  might  well 
remember,  when  considering  their  responsibility 
as  consumers. 


CHAPTER  VII 

COMMON   SENSE  AND  THE  CONSUMER 

Now  we  come  to  the  villain  of  the  piece.  In 
examining  the  claims  of  the  various  people 
who  share  in  the  produce  of  industry  we  have 
not  found  any  one  whom  we  can  condemn 
to  extinction  in  order  to  better  the  lot  of 
the  workers.  Capitalist,  employer,  manager, 
middleman,  even  some  forms  of  advertisers, 
were  found  to  be  all  essential  to  industry  on  its 
present  basis.  We  have  also  seen  that  many 
people,  who  now  live  on  the  proceeds  of  industry 
without  being  themselves  producers,  neverthe- 
less render  services  to  the  community  without 
which  it  would  enjoy  no  security,  and  would 
live  in  a  joyless  and  unenlightened  world. 

So  far  the  only  glimmer  of  light  that  we  have 
been  able  to  find  in  the  problem  of  bettering 
the  lot  of  the  workers,  without  revolutions  or 


COMMON  SENSE  AND  CONSUMER   135 

appeals  to  legislation,  is  the  conclusion  that  the 
reward  of  capital  and  also  of  the  middleman 
could  be  lessened  without  injustice,  and  without 
frightening  them  away,  if  we  could  give  them  a 
compensating  advantage  by  lessening  the  risk 
that  they  take ;  and  that  this  might  be  done 
if  industry  were  to  give  more  attention  to  pro- 
ducing things  that  are  really  wanted,  and  so 
are  sure  of  a  market,  and  less  to  luxuries  that 
cannot  be  so  certain  of  finding  buyers. 

At  the  same  time  it  has  to  be  admitted  that 
it  would  be  no  use  for  industry  to  turn  out  more 
of  the  things  that  are  really  wanted,  unless  the 
people  who  at  present  have  to  go  short  of  them 
were  enabled,  by  getting  better  wages,  to  buy 
them. 

How  is  this  concentration  of  industry  on 
real  wants  to  be  brought  about,  and  how  can 
the  wages  of  the  workers  be  increased  ?  It 
was  shown  in  Chapter  II  that  both  these  objects 
could  be  achieved  if  we  could  work  a  slight  and 
gradual  reform  in  the  manner  in  which  we  all 
of  us  spend  our  money.  Now  we  come  back 
again  to  this  point  from  which  we  started, 
having  found  by  a  process  of  exhaustion  that 

K 


136  POVERTY  AND  WASTE 

the  consumer,  or  money-spender,  is  the  only 
person  who  is  left  to  be  arraigned  and  found 
guilty. 

This  is  a  very  comfortable  conclusion,  be- 
cause it  gives  us  so  much  room.  Our  Commina- 
tion  Service  will  be  beautifully  comprehensive. 
We  are  all  of  us  consumers  or  money-spenders, 
and  all  of  us,  including  the  very  poorest,  could 
spend  our  money  to  better  advantage  if  we  tried, 
and  make  the  world  a  much  pleasanter  place 
for  ourselves  and  others. 

"  Why  should  I  try  ?  "  asks  some  one  very 
plentifully  endowed  with  common  sense.  *'  What 
has  it  to  do  with  me  ?  I  earn  £1000  a  year,  and 
I  work  for  it.  I  shouldn't  be  paid  this  income 
if  I  wasn't  worth  it  to  somebody,  and  why  on 
earth  shouldn't  I  spend  it  exactly  as  I  like  ? 
I  am  not  responsible  for  our  economic  system. 
It  hasn't  treated  me  badly.  I  pay  a  lot  of 
people  to  look  after  the  government  of  the 
country  and  it's  their  business  to  put  things 
right  if  they're  wrong.  I  entertain  freely ;  I  give 
plenty  away  to  objects  that  I  think  deserving. 
It's  my  own  money,  and  why  shouldn't  I  do 
what  I  like  with  it  ?  "> 


COMMON  SENSE  AND  CONSUMER   137 

First  of  all,  let  us  try  to  frighten  him  a  little. 
If  there  is  any  likeHhood  that  a  real  economic 
improvement  can  be  brought  about  by  more 
sensible  spending,  it  is  surely  better  to  try  this 
method  instead  of  letting  things  drift  towards 
terrible  experiments  like  General  Strikes,  and 
the  possibility  of  bloodshed  and  perhaps  revo- 
lution. Surely  it  is  plain  that  never  before  in 
the  world's  history  has  there  been  such  world- 
wide unrest  among  the  workers.  Those  who 
are  in  sympathy  with  the  workers  and  think 
that  they  ought  to,  and  must,  get  a  bigger  share 
of  the  world's  goods,  are  glad  to  see  this  unrest. 
But  to  the  man  who  is  quite  content  with  the 
manner  in  which  wealth  is  at  present  distributed, 
and  only  wants  to  enjoy  his  own  income,  it 
must  be  a  most  disquieting  and  uncomfortable 
symptom.  For  he  feels  that  he  is  really  much 
more  vulnerable  than  the  workers.  He  must 
have  his  three  good  meals  a  day,  perhaps  four. 
They  are  quite  used  to  going  hungry — one  of 
the  most  pathetic  facts  in  language  is  the  exist- 
ence of  a  regular  word  for  it  in  the  north  country, 
to  "  clem."'  If  the  workers  could  only  solve 
the  question  of  unity  among  themselves,  so 


138  POVERTY  AND  WASTE 

that  a  strike  meant  a  really  unanimous  cessation 
of  work  by  them,  a  General  Strike  would  become 
a  terrible  weapon  against  people  who  do  not 
like  to  miss  their  accustomed  creature  comforts 
for  a  day.  It  is  easy  to  talk  about  the  strong 
hand  and  martial  law,  but  the  strong  hand  is  a 
game  that  two  sides  can  play  at,  and  martial 
law  may  be  met  by  martial  lawlessness. 

But  if  our  common  sense  friend  is  a  hearty, 
robustious  person,  who  is  not  going  to  be 
frightened  by  phantom  pictures  of  what  might 
happen,  we  must  try  to  persuade  him  that  he 
is  wrong  in  his  confidence  about  his  economic 
value  and  his  right  and  title  to  all  the  good 
things  that  he  enjoys.  We  must  put  it  to  him 
that  of  course  he  must  do  just  what  he  likes 
with  his  money,  but  that  possibly  if  he  thought 
the  matter  out  he  might  like  to  use  it  in  a  manner 
that  is  a  little  different  from  his  present  method 
of  spending.  Because  if  he  has  done  us  the 
honour  of  reading  the  preceding  pages  he  has 
been  brought  face  to  face  with  the  fact  that  by 
spending  money  on  luxuries  he  causes  the  pro- 
duction of  luxuries  and  so  diverts  capital, 
energy,   and   labour   from   the   production    of 


COMMON  SENSE  AND  CONSUMER   139 

necessaries,  and  so  make  necessaries  scarce 
and  dear  for  the  poor.  He  is  not  asked  to  give 
his  money  away,  for  he  would  probably  do  more 
harm  than  good  thereby,  unless  he  did  it  very 
carefully  and  skilfully ;  but  only  to  invest  part 
of  what  he  now  spends  on  luxuries  so  that  more 
capital  may  be  available  for  the  output  of  neces- 
saries. So  that  by  the  simultaneous  process 
of  increasing  the  supply  of  capital  and  diminish- 
ing the  demand  for  luxuries  the  wages  of  the 
poor  may  be  increased  and  the  supply  of  their 
needs  may  be  cheapened  ;  and  he  himself  may 
feel  more  comfortable  in  the  enjoyment  of  his 
income. 

Then  we  proceed  to  appeal  to  that  excellent 
common  sense  of  his,  and  ask  him  whether  he 
is  quite  sure  that  because  he  receives  £1000  a 
year  he  is  really  worth  to  the  community 
ten  times  as  much  as  the  artizan  who  is  paid 
two  pounds  a  week.  How  much  of  his  £1000 
a  year  does  he  really  owe  to  himself  and  his  own 
exertions  and  abilities,  and  how  much  of  it 
ought  to  be  credited  to  his  education  and  nurture 
and  the  long  start  with  which  he  began  life  ? 
H  we  all  started  from  scratch,  he  might  fairly 


140  POVERTY  AND  WASTE 

make  some  claim  to  having  earned  his  success 
himself,  though  even  so  he  would  have  to  allow 
a  very  wide  margin  for  luck;  for  his  will  be  a  rare 
experience  if  he  cannot  call  to  mind  school- 
fellows of  his  own,  just  as  well  endowed  as  he  is 
in  character  and  ability,  to  whom  fate  has  only 
opened  her  purse  to  the  extent  of  a  few  hundreds 
a  year.  Moreover,  if  he  will  remember  the 
remarkable  proof  given  above  of  the  store  of 
intelligence  that  lies  dormant  among  the  workers 
because  they  have  no  real  education  to  awaken 
it,  he  will  see  that  if  the  career  were  actually  open 
to  talent,  and  all  talent  had  a  genuine  chance 
of  being  developed,  it  is  possible  that  his  abilities 
and  attainments  might  be  of  quite  commonplace 
standard.  As  it  is,  owing  to  this  lamentable 
waste  of  the  intelligent  material  that  lies  ready 
to  our  hands,  the  business  world  is  always 
crying  out  about  the  scarcity  of  available 
brains. 

Moreover,  still  appealing  to  his  common 
sense,  we  ask  him  to  wonder  how  much  use  his 
own  abilities  would  be  to  him  if  it  were  not  for 
the  rest  of  the  community  that  gives  him  ease 
and  security  and  supplies  him  with  all  the 


COMMON  SENSE  AND  CONSUMER   141 

comforts  and  luxuries  that  he  enjoys.  The 
argument  so  commonly  used  about  landlords — 
that  it  is  their  neighbours  who  make  their 
property  valuable,  by  wanting  to  live  on  it- 
is  true  in  a  certain  degree  about  all  of  us.  What* 
ever  our  gifts  of  mind  and  body  may  be,  they 
would  avail  us  little  towards  achieving  comfort, 
to  say  nothing  of  luxury,  if  we  found  ourselves 
planted  by  ourselves  on  a  barren  mountain 
top.  Man,  as  a  solitary  unit,  cannot  acquire 
the  well-being  that  is  now  enjoyed  by  the 
comfortable  classes;  he  can  only  do  so  as  a 
member  of  an  economic  brotherhood.  We  are 
accustomed  to  think  of  our  economic  civiliza- 
tion as  based  on  competition,  but  in  fact  co- 
operation is  much  more  important  to  it,  for  it 
is  imposible  to  compete  unless  one  first  co- 
operates. This  being  so,  since  all  of  us  who  are 
comfortable  and  well  fed  and  easy  are  so  by 
the  exertions  of  our  fellows,  is  it  in  accordance 
with  common  sense,  which  is  closely  allied  with 
common  sympathy,  to  stand  by  and  see 
millions  of  those  who  help  to  provide  our  com- 
fort go  short  of  the  necessaries  of  life  if  we 
can   do   anything  to  better  their  lot  ?     Is  it 


143  POVERTY  AND  WASTE 

"good  business  " — for  all  this  question  is  a 
matter  of  business — to  spend  money  on  things 
that  one  does  not  really  need,  if  by  so  doing 
we  impoverish  the  workers  and  sap  the  strength 
of  the  nation  ? 

"  But,"  we  shall  be  told,  "  there  always 
must  be  rich  and  poor.  It's  a  law  of  Nature 
that  some  shall  be  strong  and  some  shall  be 
weak,  and  that  the  weak  shall  go  to  the  wall."' 

Of  course  there  must  always  be  rich  and 
poor.  Even  if  all  our  incomes  were  made 
equal  to-morrow,  there  would  still  be  a  great 
difference  in  the  degree  of  our  welfare,  for  some 
men  can  live  cheerfully  on  a  hundred  a  year, 
and  to  others  a  thousand  is  penury.  But  because 
there  must  always  be  differences,  that  is  surely 
no  reason  for  sitting  still  and  leaving  things 
alone  if  by  a  slight  change  in  the  habits  of  the 
spending  classes  some  of  the  more  glaring 
differences  can  be  lessened. 

As  to  the  law  of  nature  and  the  necessary 
division  of  mankind  into  strong  and  weak,  is 
it  safe  to  appeal  to  it  before  we  have  made  quite 
sure  that  those  now  at  the  top  are  really  the 
strong  and  those  at  the  bottom  are  the  weak  ? 


COMMON  SENSE  AND  CONSUMER   143 

If  the  law  of  nature  really  had  free  play  we 
might  see  a  very  startling  redistribution  of  the 
good  things  of  the  earth.  "Were  there,"  says 
a  great  scientist  and  thinker,  "  none  of  those 
artificial  arrangements  by  which  fools  and 
knaves  are  kept  at  the  top  of  society  instead  of 
sinking  to  their  natural  place  at  the  bottom, 
the  struggle  for  the  means  of  enjoyment  would 
ensure  a  constant  circulation  of  the  human 
units  of  the  social  compound,  from  the  bottom 
to  the  top  and  from  the  top  to  the  bottom."  * 

CiviHzation,  in  fact,  consists  chiefly  of  a 
series  of  triumphs  over  the  laws  of  nature.  In 
a  natural  state,  if  we  had  a  decayed  tooth  it 
would  go  on  decaying  till  it  gave  us  such  pain 
that  we  should  pray  some  kindly  brother  savage 
to  batter  it  out  with  a  boulder,  and  it  is  likely 
that  he  would  knock  out  two  or  three  more 
with  it.  Civilization  provides  a  dentist  who 
stops  it  for  us  and  preserves  it  as  a  useful 
member  of  our  anatomy.  In  a  natural  state, 
when  dimmed  eyesight  and  dwindling  muscular 
power  made  it  impossible  for  us  to  get  food  by 
hunting  or  fishing  we  should  either  die  of  hunger 

•  Huxley  "  Evolution  and  Ethics." 


144  POVERTY  AND  WASTE 

or  be  mercifully  eaten  by  a  wild  beast.  Civiliza- 
tion keeps  us  alive  and  useful  long  after  the  laws 
of  nature  would  have  forbidden  us  to  cumber 
the  earth,  and  finally  lets  us  die  comfortably  in 
our  beds.  If  the  laws  of  nature  were  given 
free  play,  any  question  at  issue  between  a  set  of 
Northumbrian  pitmen  and  the  shareholders  for 
whom  they  work  would  very  shortly  be  settled, 
and  the  shareholders,  or  their  remnants,  would 
be  found  shouting  for  the  police. 

As  it  is,  the  artificial  arrangements  of  which 
Huxley  complains,  work  for  the  benefit,  not 
only  of  fools  and  knaves,  but  of  all  who  lead 
comfortable  and  sheltered  lives,  and  have  got 
nice  well-paid  posts,  largely  through  the  accident 
of  being  born  in  a  certain  class,  and  having  been 
taught  certain  things  at  school,  chiefly  by  their 
schoolfellows.  We  had  better  be  very  careful 
about  talking  of  the  survival  of  the  fittest,  for 
the  more  closely  common  sense  looks  at  the 
matter  the  less  certain  its  possessor  will  be  that 
in  a  really  natural  struggle  he  would  be  among 
the  survivors.  The  reason  why  man,  naturally 
a  very  weak  animal,  has  triumphed  over  all  his 
natural  enemies  is  because  he  had  the  good 


COMMON  SENSE  AND  CONSUMER   145 

sense,  by  co-operation  and  care  for  the  weak, 
to  overcome  much  of  the  terrible  waste  that  is 
imphed  by  the  unrestricted  working  of  the  law 
of  the  survival  of  the  fittest.  He  has  acted  by 
the  weaker  members  of  his  tribe,  who,  by 
natural  laws,  ought  to  have  perished,  as  the 
dentist  acts  by  our  weak  teeth,  and  kept  them 
as  useful  members  of  society.  In  fact,  we  have 
carried  our  conquest  of  natural  laws  so  far  that 
a  man's  grasp  of  the  good  things  of  Hfe  depends 
much  less  on  his  strength  and  courage  and  ability 
than  on  the  position  and  circumstances  in  which 
he  happens  to  be  born.  "Virtue  is  of  little 
regard  in  these  costermonger  times,"  and  we 
are  faced  by  a  state  of  things  under  which  large 
numbers  of  us,  and  those  by  no  means  always 
the  weakest,  do  not  get  a  fair  chance  of  life. 
Common  sense  surely  compels  us  to  do  any- 
thing that  can  be  done  to  put  this  right,  and 
in  the  meantime  advises  us  not  to  talk  too 
loud  about  the  laws  of  nature,  if  our  position 
in  the  world  depends  on  artificial  laws  which 
defeat  them. 

But  common  sense  has  still  another  cartridge 
in  its  belt.    We  shall  be  told  that,  even  if  we 


146  POVERTY  AND  WASTE 

could  persuade  the  spending  classes,  by  more 
sensible  spending,  to  increase  the  supply  of 
capital,  raise  the  wages  of  the  workers,  and 
cheapen  the  necessaries  of  life,  we  should  not 
have  touched  the  most  serious  side  of  the  problem 
of  poverty,  which  is  the  existence  of  a  host  of 
people  who,  from  mental  and  bodily  weakness, 
are  not  fit  to  work,  and  so  could  not  benefit  by 
an  increase  in  the  wages  of  the  workers.  This 
is  quite  true,  but  I  never  suggested  that  the 
reform  put  forward  in  these  pages  could,  if 
adopted,  cure  all  the  economic  evils  in  the  world. 
It  is  very  safe  to  say  that  any  remedy  which  is 
expected  to  cure  everything  is  almost  certain 
to  cure  nothing.  But  at  least  it  may  be  claimed, 
if  wages  were  raised  and  the  prices  of  necessaries 
were  lowered,  that  the  creation  of  these  unfor- 
tunate folk,  whom  heredity  and  environment 
have  combined  to  deprive  of  man's  birthright, 
would  be  sensibly  checked,  and,  if  the  process 
were  carried  far  enough,  would  be  stopped 
altogether.  Then  all  that  would  have  to  be 
done  would  be  for  the  State  either  to  see  to  it 
that  they  did  not  reproduce  themselves  or  to 
take  such  measures  for  the  care  of  their  off- 


COMMON  SENSE  AND  CONSUMER   147 

spring   that   environment   might   have    a   fair 
chance  of  undoing  the  hereditary  weakness. 

For  how  has  this  army  of  the  unfit,  whose 
existence  is  the  most  ghastly  condemnation  of 
our  economic  system,  come  into  being  ?  They 
are  the  creation  of  low  wages,  assisted  by  the 
miserable  conditions  under  which  the  worst 
paid  of  the  workers  have  lived  for  generations, 
and  to  this  source  of  their  production  has  been 
added  irresponsible  spending,  extravagance  and 
consequently  weakened  moral  fibre  among  the 
richer  classes,  which  have  turned  out  spend- 
thrift ne'er-do-weels,  who,  in  spite  of  all 
the  artificial  arrangements  complained  of  by 
Huxley,  have  gradually  sunk  to  the  dregs. 
Both  these  sources  of  the  output  of  un- 
employables  might  be  stopped  up,  if  the 
reform  suggested  in  these  pages  were  set  to 
work  and  given  time  to  bring  forth  its  results. 
Probably  it  would  take  many  generations  before 
it  would  be  possible  altogether  to  weed  out  the 
unfortunate  wights  who  are,  in  the  expressive 
popular  phrase,  "  born  tired,'*  and  simply  cannot 
face  the  daily  effort  of  regular  work.  But  much 
might  be  done  to  stiffen  their  backbones  and 


148  POVERTY  AND  WASTE 

lessen  their  number  if,  instead  of  encouraging 
their  production  by  underpaying  our  workers 
and  making  their  lot  difficult,  and  setting  a 
stupid  example  of  irresponsible  and  wasteful 
spending  among  the  richer  classes,  we  tried  to 
bring  home  to  all  the  simple  fact  that  by  wrong 
spending  we  aggravate  the  economic  evils  of 
our  present  system,  and  that  by  wise  spending 
we  help  to  correct  some  of  them. 


CHAPTER  VIII 

THE  consumer's  RESPONSIBILITY 

As  things  are  at  present,  the  manner  in  which 
we  spend  our  money  is  a  matter  in  which  we 
are  swayed  less  by  intelligence  than  by  habit 
and  convention  and  sheep-like  mimicry  of  one 
another,  tempered  by  weak-minded  submission 
to  the  bullying  of  the  advertiser. 

*'  Although,"  says  Dr.  Hadley,  **  laws  pre- 
scribing what  a  man  may  buy  or  sell  have  fallen 
into  disuse,  it  must  not  be  supposed  that  every 
man  exercises  his  intelligence  and  pleasure  to 
buy  what  will  give  him  the  most  happiness. 
People  are  bound  by  custom  where  they  have 
ceased  to  submit  to  law.  A  large  part  of  the 
expense  of  most  people  is  regulated,  not  by  their 
own  desires  and  demands,  but  by  the  demands 
of  the  public  sentiment  of  the  community  about 
them.    The  standard  of  life  of  every  family  is 


150  POVERTY  AND  WASTE 

fixed  in  large  measure  by  social  conventions. 
Few  are  intelligent  enough  to  break  away  from 
those  conventions,  even  where  they  are  mani- 
festly foolish.  Although  we  have  made  much 
progress  in  the  direction  of  economic  freedom, 
it  is  a  mistake  to  assume  that  the  authority 
of  custom  in  these  matters  is  a  thing  of  the  past. 
With  most  men  custom  regulates  their  economic 
action  more  potently  than  any  calculation  of 
utility  which  they  are  able  to  make.  Nor  can 
we  assume,  as  some  writers  are  prone  to  do, 
that  such  custom  represents  the  average  judg- 
ment of  the  community  as  to  the  things  needed 
for  the  comfort  and  happiness  of  its  members. 
It  represents  an  average  absence  of  judgment 
— a  survival  of  habits  which  doubtless  proved 
useful  in  times  past,  but  which  in  many  instances 
have  entirely  outlived  their  usefulness.  The 
success  of  advertising  shows  how  little  intelli- 
gence is  habitually  exercised  in  these  matters. 
A  man  does  not  generally  use  his  nominal 
freedom  to  buy  what  he  wants  until  some  one 
comes  and  tells  him  in  stentorian  tones  what 
he  wants  to  buy.  The  authority  of  custom  and 
tradition  can  only  be  overcome  by  the  authority 


THE  CONSUMER'S  RESPONSIBILITY  151 

of  drums  and  trumpets.  It  is  a  mistake  to 
draw  too  fine-spun  deduction  as  to  the  motives 
which  guide  buyers  in  their  choice,  when  three- 
quarters  of  the  buyers  exercise  no  choice  at  all. 
It  is  not  merely  that  people  want  things  which 
hurt  them,  or  which  fail  to  do  them  the  maximum 
good,  .  .  .  but  that  they  buy  things,  without 
knowing  whether  they  want  them  or  not, 
through  sheer  vis  inertia."  * 

This  uncomfortable  string  of  home-truths, 
dealt  out  to  us  all  by  a  distinguished  economist, 
would  not  hit  us  very  hard  if  we  were  the  only 
sufferers  by  the  absurdities  that  he  puts  before 
us  so  clearly.  If  we  chose  to  waste  our  own 
money  at  the  bidding  of  convention  and  the 
advertiser,  and  if  we  could  do  so  without 
hurting  anybody  else,  we  need  only  say  with 
Puck  :— 

"Lord,  what  fools  these  mortals  be  1 " 

and  leave  ourselves  to  the  consequences  of  our 
folly.  But  the  folly  becomes  tragedy  when  we 
have  once  grasped  the  fact  that  bad  spending 
makes  the  poor  poorer,  and  it  becomes  necessary 
to  look  more  closely  into  this  question  of  the 
♦  Hadley,  "  Economics,"  chap.  iii. 


152  POVERTY  AND  WASTE 

consumer's  responsibility  and  to  see  whether 
something  cannot  be  done  to  dehver  him  from 
the  yoke  of  convention  and  from  the  paw  of  the 
advertising  Hon. 

Whenever  the  question  of  spending  arises, 
it  usually  happens  that  the  attention  is  cap- 
tured by  the  enormous  figures  of  national 
expenditure,  and  wanders  away  into  denuncia- 
tions thereof,  especially  that  part  of  it  which 
goes  into  armaments  and  preparations  for  war. 
The  figures  are  certainly  appalling. 

"  For  the  whole  ten  years  just  coming  to  an 
end,"  writes  Mr.  A.  J.  Wilson,  "  the  cost  of  the 
army  and  navy  will  have  been  about  £306,000,000 
more  than  the  cost  for  the  ten  years  ending 
March  31,  1909.  What  might  have  been  done 
with  this  money,  had  the  same  taxation  been 
imposed  and  the  whole  of  it  made  available 
for  works  of  peace  ?  The  catalogue  of  imaginary 
benefits  might  be  made  to  fill  pages.  We 
might  have  driven  half  a  dozen  tunnels  under 
the  Channel  between  England  and  France,  and 
a  like  number  between  Scotland  and  the  North 
of  Ireland ;  vast  tracts  of  country  might  have 
been    afforested   and    reclaimed   with   infinite 


THE  CONSUMER'S  RESPONSIBILITY  153 

benefit  to  the  labouring  man  and  the  community 
at  large ;  throughout  the  country  great  reservoirs 
might  have  been  constructed,  whose  accumula- 
tions of  water  would  have  been  available,  not 
only  for  irrigation  purposes,  but  to  generate 
enough  electricity  to  supply  the  wants  of  all 
the  railways  and  factories  in  the  Kingdom.  A 
great  dispersal  of  the  population  might  by  this 
means  have  been  carried  out  through  the  de- 
velopment of  industries  in  rural  districts,  indus- 
tries .  .  .  which  would  have  in  no  way  inter- 
fered with  the  developments  of  agriculture, 
while  at  the  same  time  relieving  the  congestion 
of  cities  where  nothing  that  can  be  done  will 
ever  compensate  huddled  humanity  for  the 
effects  of  overcrowding."  * 

Mr.  Wilson's  picture  of  what  might  have 
been  is  a  telling  comment  on  what  is.  It  is  a 
wondrous  spectacle,  to  see  the  Governments  of 
all  the  most  civilized  nations  of  the  earth  pro- 
testing against  this  barbarous  waste  of  money 
and  effort,  and  yet  continuing  it  year  by  year 
in  ever  keener  rivalry,  and  without  ever  coming 
a  step  nearer  to  the  sense  of  security  which  is 

•  Investors'  Review,  February  14,  19 14. 


154  POVERTY  AND  WASTE 

what  they  are  trying  to  buy.  One  can  faintly 
picture  in  one's  imagination  the  scorn  and 
astonishment  with  which  the  Cambridge  under- 
graduate of  the  twenty-fifth  century  will  read 
the  economic  history  of  our  times,  calculating, 
with  curling  lip  and  mathematical  precision, 
the  thousands  of  millions  that  the  nations  will 
have  spent  in  this  way  out  of  sheer  fear  of 
spending  less  than  their  neighbours. 

Mr.  Norman  Angell  has  tried  to  stem  the 
tide  of  this  expenditure  by  proving  that  war 
does  not  and  cannot  pay.*  But  he  does  not 
prove  that  it  does  not  pay  better  to  win 
than  to  be  beaten.  And  how  many  wars 
in  man's  history  have  been  fought  solely  with 
an  eye  to  lucre  ?  To  do  mankind  justice,  it 
has  seldom  gone  to  war  with  a  purely  sordid 
motive.  Most  of  the  great  wars  happened 
because  the  ruling  classes  in  two  nations  had 
conflicting  theories  about  transubstantiation  or 
the  balance  of  power,  or  some  obscure  djmastic 
question.  Why  did  we  go  to  war  with  the 
Boers  ?  Finance  played  its  part  behind  the 
scenes,  but  it  never  could  have  brought  the  war 

♦  '  The  Great  Illusion,"  passim. 


THE  CONSUMER'S  RESPONSIBILITY  155 

about  if  most  of  us  had  not  wanted  to  wipe 
out  the  memory  of  Majuba  or  paint  the  map 
of  South  Africa  red,  or  do  something  or  other 
which  may  have  been  right  or  wrong,  but  at 
least  had  no  connexion  with  any  question  of 
monetary  gain. 

Government  expenditure,  however,  is  beyond 
our  present  scope,  and  there  is  this  much  to  be 
said  in  favour  of  the  huge  burden  of  taxation 
laid  on  the  nations  by  their  armies  and  navies. 
It  is  not  self-indulgence,  but  a  sacrifice  cheer- 
fully borne,  and,  as  such,  it  may  be  doing  us 
some  good  after  all.  Moreover,  huge  as  the 
figures  look,  especially  when  we  add  them 
together,  as  did  Mr.  Wilson,  for  ten  years,  they 
are  really  a  comparatively  small  affair  when  we 
put  them  by  the  side  of  the  aggregate  of  our 
individual  expenditure  on  extravagance  and 
luxury. 

What  is  luxury  ?  What  I  mean  by  luxury 
is  anything  that  we  can  do  without,  without 
impairing  our  health  of  mind  and  body.  This 
elastic  definition  shows  that  luxury  varies 
according  to  the  circumstances  and  upbringing 
of  every  individual.     In  many  famihes  luxury 


156  POVERTY  AND  WASTE 

is  not  a  matter  of  things  enjoyed,  but  of  their 
quantity  and  cost.  We  all  want  food,  drink, 
clothes,  shelter,  and  diversion ;  and  most  of 
us  could  be  quite  as  healthy  and  happy  if  the 
sums  that  we  spent  on  these  things  were  much 
less.  It  would  be  absurd  to  lay  down  a  hard 
and  fast  rule  of  spending  for  everybody,  and 
then  to  say  that  any  excess  above  that  is 
luxury.  A  certain  amount  of  amusement,  a 
certain  amount  of  beauty  in  our  homes  and 
surroundings,  are  as  necessary  to  real  health  of 
mind  as  good  food  is  to  our  bodies.  There  is 
no  need  to  preach  anything  like  stern  ascetism. 
Those  who  have  been  brought  up  to  a  certain 
scale  of  comfort  would  suffer  in  mind  and  body 
if  they  tried  suddenly  to  do  without  it,  but  in 
considering  any  fresh  expenditure  the  definition 
given  above  should  serve  as  a  working  measure. 
An  obvious  example  of  a  luxury  is  a  motor- 
car or  motor-cycle.  It  is  clear  that  we  could 
all  do  without  them  without  any  loss  of  health, 
because  twenty  years  ago  there  was  not  one 
to  be  seen  or  heard  on  our  roads,  and  the 
Act  was  still  in  force  which  made  four  miles 
an  hour  the  statutory  speed  for  mechanically 


THE  CONSUMER'S  RESPONSIBILITY  157 

propelled  vehicles,  which  still  had  to  have  a 
man  with  a  red  flag  walking  before  them. 
Certainly  we  were  at  least  as  healthy  in 
mind  and  body  in  1894  as  we  are  now.  The 
noise  and  hurry  that  motors  have  brought  with 
them  are  a  strain  on  all  our  nerves,  and  the 
thousands  of  youths  who  now  sit  on  motor- 
cycles instead  of  kicking  the  pedals  of  a  "safety  "' 
are  thereby  flabbier  in  their  muscles.  The 
present  rate  of  expenditure  on  this  form  of 
luxury  in  the  British  Isles  was  worked  out  in 
an  article  in  the  Times  of  February  3,  19 14, 
at  nearly  £74,000,000  per  annum.  This  includes 
purchases  of  new  cars.  Here  are  the  exact 
figures,  based  on  last  year's  results  : — 

New  cars  and  cycles  bought .  .  .  j{i9,9i2,428 
"  Spares "  and  accessories  .  .  .  5.773.396 
Running  expenses         .        .         (over)       47,994,000 

;^73.679.824 

These  figures,  as  the  article  points  out, 
"  cover  only  the  direct  expenditure  upon  cars 
and  their  running,  and  take  no  account  of  the 
money  expended  indirectly  in  connection  with 
motoring,  such  as  the  cost  of  suitable  clothes 
for  motoring  and  hotel  and  travelling  expenses 


158  POVERTY  AND  WASTE 

on  tour,  which  certainly  adds  several  millions 
to  the  aggregate  amount/*  Adding  this  and 
other  items,  including  a  charge  of  £11,000,000 
a  year  for  depreciation,  the  article  concludes 
with  the  statement  that  "it  is  certain  that,  at 
the  present  rate  of  increase,  the  gross  expenditure 
upon  all  branches  of  motoring  will,  before  the 
present  year  is  out,  reach  the  enormous  annual 
figure  of  £100,000,000."  But  since  it  is  perhaps 
unfair  to  debit  the  motor  with  clothes  and  hotel 
bills,  and  since  the  provision  of  a  depreciation 
fund  (out  of  which  the  car  can  be  replaced 
when  worn  out)  is  a  bookkeeping  nicety  with 
which  motorists  seldom  trouble  themselves — 
**  Nobody,"  as  one  of  them  told  me,  "  could 
keep  a  car  if  he  thought  about  depreciation" 
— it  is  safe  to  keep  to  74  millions  as  the  present 
annual  cost  of  motoring.  Then  one  must  allow 
for  the  fact  that  in  many  cases  motors  have 
taken  the  place  of  carriages,  horse  omnibuses, 
cabs,  and  carriers*  carts  ;  that  is  to  say,  many 
of  them  have  become  necessaries,  enabling  people 
to  travel  to  and  from  their  work,  and  goods 
to  be  sent  quickly  and  cheaply.  On  the  other 
hand,  however,  we  have  to  remember  that,  in 


THE  CONSUMER'S  RESPONSIBILITY  159 

the  first  place,  the  annual  cost  of  a  car  is  usually 
much  more  than  that  of  a  horse  and  carriage ; 
and,  in  the  second,  that  thousands  now  indulge 
in  motoring  to  whom,  a  quarter  of  a  century 
ago,  it  never  would  have  occurred  to  keep  a 
carriage. 

Telephones  are  another  new-fangled  toy  on 
which  the  richer  classes  spend  a  formidable 
sum  in  the  course  of  every  year.  To  every 
office  or  place  of  business  they  are  a  necessity, 
because  if  one  has  them  competition  makes  them 
essential  to  the  rest,  but  they  are  not  a  necessity 
in  any  private  house.  Not  only  are  they 
an  extravagance,  but  a  cause  also  of  further 
extravagance.  **  Before  I  had  a  telephone," 
a  friend  of  mine  lately  observed,  **  I  only  went 
to  a  theatre  if  I  had  arranged  to  beforehand. 
Now,  if  I  feel  bored  any  evening  after  dinner, 
and  don't  quite  know  what  to  do,  I  ring  up  a 
theatre  and  take  seats.  My  telephone  costs  me 
many  guineas  a  year  in  theatre  tickets." 

Expenditure  on  motoring  and  telephones  is 
confined  to  the  comparatively  well-to-do  classes. 
If  we  added  to  its  total  the  annual  cost  of  hunting, 
shooting,  horse-racing,  yachting,   and   all   the 


i6o  POVERTY  AND  WASTE 

extravagance  now  practised,  down  to  much  lower 
strata  in  the  social  system,  on  dress  and  food 
and  drink  and  entertainment,  the  new-fashioned 
habit  of  a  yearly  spell  of  winter  sporting  abroad 
and  of  so-called  week-end  holidays,  it  is  safe  to 
guess  that  as  individuals  we  spend  on  amusement 
and  luxury  very  many  more  millions  a  year  than 
could  be  saved  by  us  as  a  nation,  if  armies  and 
navies  were  all  abolished  and  that  long-promised 
"boom  in  ploughshares''  became  at  last  an 
accomplished  fact. 

"  But,"  I  shall  be  told,  *'  motoring  has 
brought  a  great  industry  into  being,  and  most 
of  these  millions  spent  on  it  go  into  the  pockets 
of  the  working  classes."-  Quite  true,  and  it 
would  be  equally  true  if  the  wealthy  classes 
suddenly  developed  a  passion  for  going  up  and 
down  Eiffel  Towers  all  day,  and  every  one  had 
his  own  tower,  duly  provided  with  lifts  and  a 
dining-room  at  the  top,  in  his  own  grounds. 
Armies  of  workmen  would  be  wanted  to  build 
all  the  towers  and  repair  them  and  paint  them 
and  to  work  the  lifts  and  cook  and  serve  the 
meals  at  the  top.  It  would  be  a  magnificent 
new  industry,  and  would  give  employment  to 


THE  CONSUMER'S  RESPONSIBILITY  i6i 

thousands.  Any  stupidity  or  crime  that  any 
one  chooses  to  spend  money  on  gives  employ- 
ment to  somebody.  Bear-baiting  and  body- 
snatching  were  both  fine  industries  in  their 
day,  and  the  slave  trade  provided  thousands 
of  honest  fellows  with  a  good  living. 

But  there  is  this  great  and  essential  difference 
between  spending  money  on  something  that 
is  not  really  needed,  and  devoting  it  to  produc- 
tive purposes,  that  in  the  one  case  the  money 
spent  is  gone  as  soon  as  the  article  purchased 
is  worn  out,  or  the  momentary  pleasure  bought 
has  been  enjoyed,  while  in  the  other  a  certain 
amount  of  capital  has  been  invested  in  industry 
and  will  produce  for  years  to  come  wages  for 
workers,  salaries  for  managers,  and  interest 
and  profit  for  shareholders. 

Let  us  see  what  happens  to  all  the  millions 
that  the  motoring  classes  every  year  put  into 
this  form  of  amusement.  They  pay  wages  to 
thousands  of  people,  and  give  profits  to  share- 
holders, and  fees  to  directors  and  managers, 
and  pay  to  advertisers  and  all  the  hangers-on 
of  the  industry.  At  the  same  time  those  who 
minister  to  the  various  wants  of  all  these  people 


i62  POVERTY  AND  WASTE 

who  have  received  this  money  get  their  share 
of  it,  as  it  is  passed  on  in  payment  for  food 
and  clothes  and  housing  and  their  other  wants. 
All  this  money  goes  into  circulation  and  keeps 
hundreds  of  thousands  profitably  busy.  Wliat 
could  be  better  ? 

Just  this.  If  these  millions  were  not  spent 
on  motoring  or  on  any  other  form  of  luxury, 
they  would  be  saved  and  invested  either  directly 
by  their  owners  or  by  the  bankers  to  whom  they 
were  entrusted.  By  being  invested  they  would 
be  put  into  the  hands  of  some  private  adventurer 
or  public  company  to  work  or  extend  some 
industry,  or  into  the  hands  of  some  public 
body  to  carry  out  some  public  work.  "  While, 
on  the  one  hand,"  says  J.  S.  Mill,  "industry 
is  limited  by  capital,  so  on  the  other  every 
increase  of  capital  gives,  or  is  capable  of  giving, 
additional  employment  to  industry ;  and  this 
without  assignable  limit."  *  The  adventurer 
or  company  or  public  body  that  borrowed  the 
money  from  its  owners  would  spend  them  in 
building  a  railway  or  a  factory  or  a  ship  or  in 
bringing    waste   land   into    cultivation,    or   in 

♦  "  Principles  of  Political  Economy/'  Bk.  I.,  chap.  v. 


THE  CONSUMER'S  RESPONSIBILITY  163 

the  hundred  other  methods  for  which  capital 
is  required. 

In  whatever  way  the  capital  was  spent,  it 
would  give  employment  and  circulate  money 
through  all  classes,  just  as  did  the  sum  that 
was  spent  on  motors;  but  there  would  be 
this  great  and  important  difference  in  the  sub- 
sequent result,  that  instead  of  so  many  motors 
having  been  acquired  in  exchange  for  it,  a 
factory  or  a  railway  or  a  ship  would  have  been 
built  and  set  to  work  to  do  productive  work, 
or  a  city  would  have  improved  its  water  supply 
or  laid  out  a  park  or  cleared  away  a  slum  area, 
to  the  benefit  of  the  health  and  vigour  and 
happiness  of  its  inhabitants  for  all  time.  In 
ten  years'  time  the  motor  will  have  nearly 
rattled  itself  to  pieces,  and  in  the  meantime  will 
have  earned  little  or  nothing  for  its  owner,  who 
will  have  had  to  keep  it  running  out  of  his  own 
pocket.  Its  sole  use  will  have  been  to  convey 
him  about  the  country.  The  railway  and  the 
factory  and  the  ship  will  still  be  working  and 
carrying  and  producing  goods,  and  in  the  mean- 
time will,  if  built  and  managed  with  care,  have 
produced  enough  for  their  maintenance,   and 


i64  POVERTY  AND  WASTE 

to  pay  interest  and  profit  to  the  capitalist, 
salaries  to  the  managers,  and  wages  to  those 
employed  on  them.  The  ship  will  be  showing 
signs  of  wear  and  tear,  but  her  earnings  ought 
to  have  been  sufficient  to  create  a  big  depre- 
ciation fund,  so  that  by  the  time  she  is  old 
iron,  enough  will  have  been  saved  out  of  her 
profits  to  buy  a  new  one  to  take  her  place. 

Thus  we  see  that  all  money  which  is  held 
back  from  being  spent  on  luxuries  and  put  into 
production  has  a  more  or  less  permanent 
existence.  It  goes  on  making  more  wealth  and 
employing  more  labour;  if  the  instrument  of 
production  that  it  goes  to  create  is  short-lived 
like  a  ship  or  a  machine,  the  profits  earned 
from  it  must  be  big  enough  to  replace  it  when 
it  is  worn  out,  or  it  would  not  pay  to  make  it. 
So  money  that  is  well  invested  breeds  more 
capital  and  more  employment.  Money  that 
is  spent  on  luxuries  is  wasted  as  soon  as  the 
fleeting  life  of  the  toy  that  it  buys  is  over.  It 
is  true  that  some  few  luxuries  are  much  more 
long-lived  than  a  ship.  A  diamond  tiara  or  a 
rope  of  pearls  is  an  heirloom  and  a  possession 
from  one  generation  to  another.    But  in  the 


THE  CONSUMER'S  RESPONSIBILITY  165 

meantime  it  is  so  much  money  locked  up, 
earning  nothing  for  anybody,  and  further  it 
would  lose  its  value  to-morrow  if  a  change  in 
feminine  fashion  made  the  wearing  of  such 
glittering  baubles  a  sign  of  bad  taste.  ^ 

"  But  you  have  begged  the  whole  question," 
says  a  shrewd  critic,  "  when  you  say  that  money 
well  invested  breeds  more  capital  and  more 
employment.  That  little  word  *  well '  involves 
a  huge  assumption.  Isn't  it  better  to  buy  a 
motor-car  than  to  put  a  thousand  pounds  into 
some  wild  cat  venture  in  the  City  and  lose  the 
whole  of  it  and  never  get  a  pennyworth  of  fun 
out  of  it  ?  " 

This  is  quite  true,  and  the  many  miUions 
that  have  been  lost  in  wild  cat  ventures  are  a 
miserable  cause  of  economic  loss  and  depression. 
In  fact,  I  have  lately  heard  a  business  man 
contend  that  Germany  will  soon  be  the  richest 
country  in  the  world,  solely  because  its  Govern- 
ment takes  care  of  the  investor  and  protects 
him  against  wild  cats,  and,  if  a  company  is 
found  to  have  been  dishonestly  started  or 
managed,  puts  the  directors  into  jail.  But  if 
people  spent  less  on  luxuries  they  would  no 


i66  POVERTY  AND  WASTE 

longer  be  tempted  to  "go  a- whoring  after  false 
gods,"  in  the  form  of  unsound  securities.  Rotten 
companies  and  securities  are  provided  because 
the  gullible  and  greedy  public  asks  for  them,  and 
it  usually  asks  for  them  because  its  extravagance 
is  so  clamorous  that  it  tries  to  take  short  cuts 
to  wealth.  Then  it  often  suffers  the  probable 
consequences  of  taking  short  cuts  in  country 
that  one  does  not  know.  "  It  is  so  hard  to  make 
both  ends  meet  nowadays,"  one  hears  folk  say, 
"  that  I  can't  afford  to  invest  my  money  for  less 
than  six  per  cent."  If  one  inquires  why  it  is  so 
hard  to  make  both  ends  meet,  one  finds  that  it 
is  because  the  complainant,  who  in  days  gone 
by  never  dreamt  of  keeping  a  carriage,  must 
have  a  motor  now  because  all  his  neighbours 
have  got  them,  that  instead  of  entertaining  his 
friends  pleasantly  and  simply  by  his  own  fire- 
side, he  thinks  it  necessary  to  ask  them  to  dine 
at  a  fashionable  hotel,  on  questionable  food 
and  in  uncomfortable  surroundings,  to  the 
strains  of  alleged  music  that  drown  all  possi- 
bility of  conversation,  and  that  in  other  respects 
he  is  "  in  the  movement "  and  leading  a  harassed, 
unsatisfactory,    unwholesome,    and   much   too 


THE  CONSUMER'S  RESPONSIBILITY  167 

expensive  existence.  And  so  he  must  have  six 
per  cent,  or  ten,  if  he  can  get  it. 

Speculation  is  quite  a  legitimate  form  of 
amusement  for  those  who  can  afford  it,  and  with- 
out it  we  should  never  get  a  new  industry  started 
or  a  new  venture  tried.  It  only  becomes  stupid 
and  criminal  when  impecunious  people  try  to 
make  it  a  source  of  income,  and  to  persuade 
themselves  that  they  are  investing  when  they 
are  in  fact  only  gambling. 

If  we  only  learnt  to  spend  money  with  more 
sense  of  responsibility  and  to  remember  that 
when  we  buy  luxuries  we  make  the  lot  of  the 
poor  harder,  we  should  not  only  benefit  the  poor 
but  incidentally  ourselves  also,  and  at  the  same 
time  we  should  work  a  great  financial  reform, 
without  any  need  for  the  Draconian  methods  of 
our  German  neighbours.  We  should  give  our- 
selves a  margin  and  so  be  able  to  prefer  the 
comfortable  security  of  a  solid  investment  to 
the  alluring  glitter  of  a  brilliant  gamble.  The 
supply  of  rotten  securities  would  be  turned  off 
at  the  tap  if  there  were  no  gullible  public  ready 
to  swallow  them,  through  ignorant  greed  bred  of 
stupid  extravagance.     A  horde  of  questionable 

M 


i68  POVERTY  AND  WASTE 

company  promoters  and  share-pushers  and  other 
organizers  of  financial  rottenness  would  have 
to  turn  over  new  leaves,  and  honest  finance 
would  come  by  its  own,  being  no  longer  defiled 
by  pitch  from  the  buckets  of  the  bucket  shops. 

Then,  when  the  wrong  kind  of  speculation 
had  been  done  away  with,  and  mere  ignorant 
gambling  no  longer  led  the  impecunious  into 
disaster,  there  would  be  more  money  for  the 
right  kind  of  speculation,  the  testing  of  new 
processes  and  the  financing  of  new  inventions. 
Speculation  is  necessary  to  economic  progress, 
but  it  ought  to  mean  the  risking  of  capital 
on  honest  but  unproved  ventures,  put  before 
the  public  by  responsible  firms,  and  the  risk 
should  only  be  taken  by  those  who  are  prepared, 
and  can  afford,  to  lose  their  money. 

Finance  would  thus  be  cleaner  if  expenditure 
were  more  sensible,  but,  at  the  same  time,  much 
of  the  advantage  would  be  lost,  unless  the 
leaders  of  finance  were  more  careful  to  see  that 
the  funds  which  they  place  at  the  disposal  of 
borrowers  all  over  the  world  are  put  to  good  and 
reproductive  uses,  and  are  not  muddled  away 
or  used  for  political  purposes  or  worse.    The 


THE  CONSUMER'S  RESPONSIBILITY  169 

recent  fashion  of  investing  abroad  has  been  full 
of  temptation  to  Governments  of  backward 
States  and  has  sown  a  crop  that  has  yet  to  be 
harvested,  though  some  of  its  firstfruits  have 
already  been  garnered.  But  the  financial  world 
is  already  showing  more  consciousness  of  this 
responsibility.  During  the  Balkan  war,  the 
London  market  was  rigorously  closed  to  the 
beUigerents,  in  spite  of  the  tempting  rates  that 
they  offered.  Mr.  Norman  Angell's  preaching 
had  had  its  effect.  In  Paris  it  was  otherwise, 
and  now  Paris  is  sorry. 

While  we  are  on  this  subject  of  investing 
money  abroad,  it  may  be  well  to  anticipate  an 
objection,  that  money  which  goes  abroad  will 
not  help  the  labour  market  at  home.  The 
answer  to  this  objection  is,  that  money  well 
invested  abroad  is  likely  to  increase  the  pro- 
duction of  food  and  raw  material,  and  so  reduce 
the  prices  of  necessaries,  and  also,  that  trade 
activity  and  rising  wages  are  nearly  alwa3^s 
seen  at  times  when  we  are  making  large  exports 
of  capital. 

A  sense  of  responsibility  in  the  enjoyment  of 
wealth  is  no  new-fangled  notion.     In  the  Middle 


170  POVERTY  AND  WASTE 

Ages  the  owner  of  land,  then  the  form  in  which 
wealth  was  most  commonly  held,  owned  it  only 
on  condition  that  he  put  so  many  men,  in  pro- 
portion to  his  wealth,  into  the  field  when  called 
on  by  his  sovereign,  and  put  himself  at  their 
head  when  they  went  into  battle.  This  respon- 
sibility is  long  obsolete,  and  in  the  eye  of  the  law 
and  of  custom  a  man  who  cuts  off  coupons  or 
draws  dividends  and  rents,  or  earns  a  big  salary, 
may  do  as  he  pleases  with  his  money.  If  he 
makes  handsome  contributions  to  charity,  it  is 
counted  to  him  for  righteousness,  and  rightly, 
since  he  is  giving  away  what  he  believes,  and 
his  neighbours  believe,  to  be  his  own.  But,  in 
fact,  it  is  his  own  only  in  a  very  limited  sense. 
If  he  has  inherited  it,  he  owes  the  peaceful 
possession  of  it  to  the  protection  given  him  by 
the  rest  of  the  community.  If  he  earns  it  by 
his  abilities,  he  owes  it  to  exceptional  training 
that  his  abihties  have  had,  and  to  the  neglect 
of  the  abilities  of  the  greater  part  of  the  popula- 
tion, through  lack  of  this  training.  The  ease 
and  comfort  that  he  enjoys  only  exist  because 
he  is  a  member  of  a  great  whole,  that  works  for 
him  and  works  with  him.     If  he  spends  his 


THE  CONSUMER'S  RESPONSIBILITY  171 

money  in  a  manner  that  is  harmful  to  the  whole, 
he  is  not  making  a  fair  return  to  it  for  the 
benefits  that  it  pours  on  him,  and  any  expendi- 
ture that  makes  the  lot  of  the  poor  harder  is 
unquestionably  harmful  to  the  nation  as  a 
whole.  Apart  from  any  considerations  of 
humanity  and  equity,  it  is  economically  un- 
sound that  a  large  proportion  of  the  population 
should  be  short  of  the  necessaries  of  life. 

It  is  a  commonplace  that  needs  no  proof 
that  extravagance  on  the  part  both  of  nations 
and  of  individuals  has  increased  very  fast  in  the 
last  few  generations.  The  consequences,  scarce 
capital  and  high  prices,  are  before  our  eyes, 
"  plain  as  way  to  parish  church."  High  taxes 
prevent  our  saving  and  so  does  a  so-called  high 
standard  of  comfort,  which  generally  means  a 
high  standard  of  ostentation,  and  of  expenditure 
according  to  convention,  instead  of  according  to 
our  wants. 

"  For  at  least  half  his  expenditure,"  says 
Mr.  Dibblee,  "  an  ordinary  individual  does  not 
know  what  he  wants,  and  out  of  the  other  half 
for  at  least  a  half  he  does  not  get  what  he  wants. 
.  ,  .  Half  the  furniture  of  any  house  is  mere 


172  POVERTY  AND  WASTE 

mimicry  of  other  establishments,  whose  use  is  in 
display  without  beauty  or  comfort.  Half  the 
clothing  of  either  children  or  adults  is  dictated 
by  fashion  and  discarded  before  consumption. 
Half  the  wages  of  most  of  those  who  pay  any 
for  domestic  service  are  for  the  performance  of 
ceremony,  useless,  boring  and  time-wasteful. 
Few  of  us  are  perhaps  willing  to  admit  this 
specifically  in  our  own  cases.  .  .  .  But  it  is 
easier  to  see  the  truth  of  such  a  generalization 
in  the  habits  of  others,  particularly  of  the  very 
rich,  whose  estates  and  stables,  yachts,  gardens 
and  pictures  are  bought  for  them,  kept  going  for 
them  and  regulated  for  them  down  to  the  last 
boot-button  by  a  whole  army  of  officials  and 
experts  with  only  an  occasional  reference  to  any 
personal  enjoyment,  which  their  owner  may 
expect  from  them."  * 

Let  us  leave  the  question  of  national  extra- 
vagance to  statesmen.  Individual  extravagance 
is  a  matter  that  each  one  of  us  can  deal  with 
himself,  as  far  as  he  is  guilty  of  it.  As  long  as 
he  believes  that  he  only  is  a  sufferer  by  it,  and 
that  if  he  outruns  the  constable  he  alone  takes 

♦  "  The  Laws  of  Supply  and  Demand,"  pp.  22,  24. 


THE  CONSUMER'S  RESPONSIBILITY  173 

the  consequences,  he  can  go  on  merrily  wasting 
the  good  things  of  the  earth.  But  when  once 
he  has  grasped  the  fact  of  the  consumer's 
responsibihty,  he  sees  that  it  is  one  which  he 
cannot  evade.  We  are  all  consumers,  and  by 
our  demand  for  goods  and  services  we  decide 
what  goods  and  services  shall  be  brought  forth 
into  the  world's  mart.  If  we  abstain  from,  or 
reduce,  our  luxurious  and  frivolous  consumption, 
we  check  the  production  of  luxuries,  and  set 
free  capital  and  energy  for  the  production  of 
necessaries.  At  the  same  time,  by  checking  our 
consumption  of  goods  that  we  do  not  want  we 
save  more  capital  and  so  quicken  the  demand 
for  labour,  and  so  the  workers  are  enabled  to 
take  advantage  of  the  increased  supply  of 
necessaries.  When  the  workers  are  all  supplied 
with  necessaries  and  poverty  in  its  grimmest 
aspect  has  been  driven  off  the  face  of  the  civilized 
earth,  then  it  is  likely  enough  that  increased 
production  may  give  us  a  surplus  that  we  can 
use  as  we  like.  At  present  we  consume  luxuries 
at  the  expense  of  the  ill-fed  workers. 

As  we  are  all  consumers  so  we  all  have  this 
consumer's  responsibility,  and  nearly  all  of  us 


174  POVERTY  AND  WASTE 

ignore  it.  Extravagance  is  rife  in  all  classes. 
Thanks  to  the  drums  and  trumpets  of  the 
advertiser,  and  the  blatant  pubhcity  with  which 
the  luxurious  exploits  of  the  wealthy  are  nowa- 
days chronicled,  the  habit  of  aping  the  expen- 
diture of  those  better  off  than  ourselves  is 
pathetically  general.  The  thriftlessness  of  the 
poor,  and  the  terribly  bad  use  that  they  make 
of  the  pittance  that  civilized  society  hands  out 
to  them,  are  lamented  by  all  who  have  worked 
among  them.  The  marvels  that  the  really 
destitute  achieve  in  keeping  body  and  soul 
together  on  next  to  nothing,  are  almost  paralleled 
by  the  recklessness  with  which  those  who  are 
rather  better  off  take  no  thought  for  the  morrow, 
and  waste  on  betting  or  drink  or  cheap  finery 
money  that  is  needed  for  their  food  and  clothing. 
In  their  case  it  is  natural  enough.  How  many 
of  us,  who  have  been  brought  up  differently, 
would  act  differently  if  we  had  to  live  their  lives 
and  face  the  problems  that  they  deal  with  daily, 
and  look  forward  to  the  future  that  is  before 
them  ?  But  it  is  one  of  the  lessons  that  the 
leaders  of  the  workers  have  to  teach,  that  they 
also  have  responsibility  as  consumers  and  that 


THE  CONSUMER'S  RESPONSIBILITY  175 

iabour  can  never  win  a  complete  victory  until 
it  has  conquered  its  own  lack  of  thrift. 

*'  When  we  remember,"  says  Walker,  *'  that 
the  expenditure  of  the  people  of  Great  Britain, 
annually,  for  alcoholic  beverages  reaches  the 
enormous  sum  of  £180,000,000  .  .  .  four-fifths, 
at  least,  of  which  is  spent  in  a  way  that  is  not 
only  without  any  beneficial  effect,  but  is  posi- 
tively injurious,  a  large  part  of  it  going  to  the 
destruction  of  moral,  intellectual,  and  physical 
power,  we  get  a  rude  measure  of  the  force  which 
a  wiser  consumption  of  wealth  might  introduce 
into  the  economic  life  of  that  country."  * 

In  this  matter  of  the  consumer's  responsi- 
bility an  enormous  influence  can  be  exercised 
by  women.  In  the  constituency  of  consumers 
they  have  already  got  a  vote  and  a  majority, 
and  can  use  it  to-day  with  overwhelming  effect. 
Most  of  the  world's  spending  is  done  by  them, 
especially  in  the  middle  class,  whose  numbers 
and  wealth  make  its  action  all-important.  In 
many  middle  class  households  the  man,  the 

♦  '•  Political  Economy,"  Part  V.  chap.  iii.  The  Second 
Edition,  from  which  I  quote,  was  published  in  1887.  Our 
national  drink  bill  for  1913  was   /166J  millions. 


176  POVERTY  AND  WASTE 

ostensible  head  of  the  family,  is  more  or  less  in 
the  position  of  the  doctor  described  by  Mr. 
Arnold  Bennett  in  "  Buried  Alive,"  whose 
"  wife  and  two  fully  developed  daughters  spent 
too  much  on  their  frocks.  For  years,  losing 
sight  of  the  fact  that  he  was  an  immortal  soul, 
they  had  been  treating  him  as  a  breakfast-in- 
the-slot  machine :  they  put  a  breakfast  in  the 
slot,  pushed  a  button  of  his  waistcoat,  and  drew 
out  banknotes."  Household  expenditure,  that 
bulks  so  large  in  most  of  our  Budgets,  is  usually 
regulated  almost  entirely  by  the  women  of  the 
family,  who  are  the  spending  departments  of  the 
domestic  Civil  Service.  If  women  could  be 
brought  to  see,  and  act  on,  their  responsibility 
as  consumers  we  should  have  made  a  long  step 
forward  towards  a  big  reform.  How  far  some 
of  them  are  from  this  perception  is  shown  by 
the  example  of  a  lady  who  lately  achieved  the 
honour  of  public  mention  in  the  newspapers  by 
owning  over  a  hundred  nightgowns. 

Summing  our  conclusions  up,  we  may  say 
that  two  evils  now  stand  in  the  way  of  a  better 
share  for  the  workers  in  the  good  things  of  the 
earth.    These  are  the  dearness  and  scarcity  of 


THE  CONSUMER'S  RESPONSIBILITY  177 

capital  and  the  dearness  and  scarcity  of  food  and 
raw  materials.  Both  these  evils  every  one  of 
us  can  help  to  correct  by  spending  less  on 
luxuries,  and  living  more  sensible  lives,  in 
accordance  with  a  more  genuine  standard  of 
comfort,  based  on  our  real  wants  instead  of 
mimicry  of  the  extravagance  of  our  neighbours. 
If  we  did  so  we  should  at  the  same  time  be 
working  to  do  away  with  both  the  causes  of 
discontent  with  the  results  of  civilization  re- 
ferred to  in  Chapter  I.  There  we  found  that 
this  discontent  was  due  partly  to  our  comparing 
our  present  comforts,  not  with  those  enjoyed  by 
our  forbears,  but  with  those  indulged  in  by  our 
neighbours,  and  partly  to  an  uncomfortable 
feehng  that  the  existence  of  poverty  in  the  midst 
of  wealth  is  a  disgrace  to  our  civilization.  Now 
we  find  that  we  can  do  something  towards 
expelling  both  these  causes  of  discontent  by  a 
single  effort  of  mind,  by  seeing  that  members  of 
the  well-fed  classes  are  better  off  than  they  have 
ever  been  before,  if  only  they  would  recognize 
the  fact  and  not  always  be  asking  for  more. 
The  keenness  of  the  struggle  among  them  is 
only  due  to  a  false  ideal,  which  makes  comfort 


178  POVERTY  AND  WASTE 

consist  in  spending  more  than  one's  neighbour. 
If  they  would  straighten  out  this  twist  in  their 
minds,  they  would  kill  one  cause  of  discontent 
at  a  blow,  and  by  the  more  rational  expenditure 
that  would  follow  they  would  do  something  to 
kill  the  other ;  by  checking  the  demand  for 
luxuries,  laying  by  more  capital  for  industry, 
and  helping  the  production  of  necessaries.  So 
we  might  do  something  towards  making  a  world 
in  which  the  poverty  of  those  who  do  the  hardest 
work  should  no  longer  be  a  reproach  to  all  who 
enjoy  its  comforts.  And  we  could  do  it  our- 
selves, every  one  of  us  who  have  more  than  a 
living  wage. 


INDEX 


Advertising,  cost  of,  124 

Balkan    War   and    finance, 

169 
Bennett,  Mr.  E.  N.,  quoted, 

52.  53 
Boer    War,  motives  behind, 

154 

Canals,    Royal    Commission 

on,  27 
Capital,  definition  of,  41 

,  effect  of  an  increase  of, 

on  wages,  28,  162 

• ,  essential  to  industry,  45 

,  has  to  be  paid  for,  47 

• ,  has  to  be  saved,  42 

,  rise  in  the  price  of,  66 

,  scarcity   and    dearness 

of,  26,  27,  65  et  seq. 
Coal,    wholesale    and    retail, 

116, 117 
Co-operation  and  the  middle- 
man, 1x8 

DiBBLEE,  Mr.,  quoted,  53, 1 20, 

124,  171 
Drink,  cost  of,  175 

Earning  Power,  hereditary, 

50  et  seq. 
Economic  system,  weaknesses 

of  our  present,  93 


Employers,  difficulties  to  be 

faced  by,  72  et  seq. 
Environment,  influence  of,  51 
Extravagance,  recent  increase 

of,  171  et  seq. 

Finance,  responsibility  of,  168 

Germany  and  investors,  165 
Great  Eastern,   the,  commer- 
cially a  failure,  75,  76 

Hadley,   Dr.,    quoted,    149 

et  seq. 
Huxley,  quoted,  143 

Intelligence,  waste  of,  iii, 

1X2 

Investment  abroad,  effect  of, 
on  wages,  169 

Joint-stock  Companies,  re- 
lations of,  with  labour,  70 
et  seq. 

Luxury,  defined,  155 

,  effect  of,  on  prices  of 

necessaries,  21 

,  effect  of    abolition  of, 

22  et  seq. 

,  expenditure  on,  com- 
pared with  expenditure  on 
production,  45,  46,  161  et 
seq. 


i8o 


INDEX 


Malthus,  doctrine  of,  32,  33 
Management,  importance  of, 

74  et  seq. 
Melbourne,  Lord,  quoted,  38 
Mercantile  cities,  wealth   of, 

iig,  120 
Middlemen,  costliness  of ,  119 

,  necessity  of,  115  et  seq. 

Mill,    J.    S.,  on    capital  and 

wages,  162 
Motoring,  cost  of,  137  et  seq. 

National  expenditure,  con- 
sumes capital,  64,  65 

Norman  Angell,  Mr.,  on  war 
expenditure,  154,  169 

Pollock,  Mr.  D.,  quoted,  75, 

76 
Profit  sharing,  difficulties  of, 

73.  74 

Railways,  and  v/ages,  80 

,  Parliamentary  expenses 

of,  129 
Raw  materials,  dearness  of, 

23 

Risk,  has  to  be  paid  for,  57 

et  seq. 
might  be  lessened,  62, 

121 

Schuster,  Sir  Felix,  quoted, 

65 
Socialism,  advantages  of,  94 

et  seq.,  122 

,  obstacles  to,  96  et  seq. 

Speculation,  right  and  wrong 

kinds  of,  167  et  seq. 
Spending,    individual,   149  et 

seq. 


Spending,  national,  152  e/  seq. 
Strikes,  benefits  wrought  by, 

90 
,  evils  of,  go 

Telephone,  as  cause  of  ex- 
travagance, 159 

Thrift,  unattractiveness  of, 
25 

Wages,  advantages  of  a  rise 
in,  82  et  seq. 

of  agricultural  labourers, 

52 

of  railway  men,  80 

Walker,  quoted,  41,  42,  175 
Wealth,  as   an    incentive   to 
work,  34  et  seq. 

,  inherited,  48,  49 

,  output  of,  limited,  20,  21 

Wild    cats,  produced  by  ex- 
travagance, 165  et  seq. 
Wilson,  Mr.    A.    J.,    quoted, 

152 
Women,  gratuitous  work  done 

by,  53 
,  influence  on  spending, 

175  et  seq. 
Workers,  claim  of,  to  better 

wages,  87  et  seq. 

,  extravagance  of,  174 

,   irregular   working   by, 

107,  108 
,  privileged  position  of. 


77 

,  self-sacrifice  among,  108 

,     weakened     discipline 

among,  loi,  102 
Workers'  Educational  Associ- 
ation, results  achieved  by, 
no 


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